Iowa Senator Stumps for Ethanol

For over 100 years, the fossil fuel industry has had a monopoly on our transportation fuel. They built the market. They own the infrastructure. They weren't about to use a product they didn't manufacture, own or profit from. So Congress created a tax incentive to encourage big oil to use the product and make it available to their consumers. It was paired with an import tariff to make sure that only domestic ethanol receives the benefit of the tax incentive.

So the tax incentive and the tariff worked together to do two things: The incentive exists to encourage the use of domestic ethanol. The tariff exists to ensure that we aren't giving a tax incentive to already subsidized foreign ethanol.

In other words, wouldn't it be silly to have a tax incentive for the production of a domestic alternative energy and then allow the import of it, which would have taxpayers subsidizing an alternative form of energy coming in from another country?

Together, these two approaches ensure that we don't replace our dependence on foreign oil with a dependence upon foreign ethanol. The incentive was created to encourage big oil to use a domestically produced product and a renewable product. In 2005, Congress created the Renewable Fuels Standard. The standard was created to ensure a minimum amount of renewable fuels was used in the fuel supply. In 2007, it was greatly expanded. It mandates the use of 36 billion gallons of renewable fuel annually by 2022. But that decision, made in 2007, also limited the amount of ethanol that can be made from grain to 15 billion gallons.

Incentives and mandates?

One of the criticisms I hear occasionally is that the ethanol receives both an incentive and a mandate.

First, while the mandate requires that the fuel be used, it does not mandate that the ethanol be produced domestically. The incentive acts as an encouragement to use homegrown products. It increases economic activity at home and works to reduce our dependence upon foreign oil. It doesn't do any good if you are importing a domestic renewable fuel if it can be done here locally, creating the jobs here.

Secondly, the mandate acts as a floor to ethanol use. Without the incentive, we would consume a bare minimum. The incentive encourages ethanol use beyond the mandate. Some in the environmental community are quick to raise objections to the biofuels mandate as well as the incentive. I would like to suggest to them that this is a clear example of limitless hypocrisy and intellectual dishonesty in this town. Many of the loudest voices against these policies are the same voices who lobby me for tax incentives and also mandates for wind, solar, geothermal and other renewable energy.

I happen to be a strong supporter of electricity generated from wind and other renewable sources. I first authored the production tax credit for wind in 1992. Over the years, it has been expanded to include other types of resources. Since as far back as 2003, environmental advocacy groups have been pushing for a renewable portfolio standard, which is a mandate that utilities around the country use a certain amount of wind or other types of alternative energy instead of coal in the production of electricity.

So now what do we hear? They want the production tax credit for wind and other renewable electricity and a mandate that it be produced. Yet they oppose these same policies for biofuels.



A cleaner environment

I have been a champion of ethanol and biofuels for a long time. I am well aware of the positive role ethanol is playing to create a cleaner environment. It is improving our economic and national security and it is creating jobs and economic activity in rural America. In 2010, nearly 90 percent of all gasoline sold in the United States contained some ethanol. The 13 billion gallons of ethanol produced in the United States reduced our oil imports by 445 million barrels of oil.

After domestic oil production and imports from Canada, U.S. ethanol production is the third largest source of transportation fuel. U.S. ethanol production is larger than what we import from Saudi Arabia or even from Hugo Chavez's Venezuela. Without domestic biofuels, we would be on bended knees even more than we are today, begging others for oil.

Just think what has developed in [recent] weeks of [unrest in] Libya. We have OPEC having to go to Saudi Arabia to make up the difference, just because of 2 percent of the oil production being affected. Why would we want to be more dependent upon foreign sources of energy, particularly for our national security?

Ethanol is the only reliable, legitimate alternative to crude oil. Domestic ethanol currently accounts for nearly 10 percent of our transportation fuel. There is no other renewable fuel that comes close to achieving the economic, environmental and national security benefits currently delivered by this biofuel that we call ethanol.



Ethanol and food prices

There are other well-funded misinformation campaigns underway to undermine the only alternative to crude oil. Big oil has been joined in recent years by opportunistic grocery manufacturers who hope to find a scapegoat in their desire to increase profits and raise food prices. They did this just two years ago, when corn was $7. They scapegoated ethanol. They needed a cover to raise the price of food and then, within seven months, when the price of corn was down to half that price, $3.50 per bushel, did you see the price of food come down? No. You are going to find the same thing now.

These people continue to perpetuate the same tired, baseless arguments to try to undermine our efforts toward energy independence. They are more interested in protecting market share and profits than national economic security.

The American public deserves an honest, fact-based discussion about the benefits of reducing our dependence on people such as Hugo Chavez and Moammar Gadhafi. They deserve to hear the benefits of reducing our dependence on dirty fossil fuel.

Daylight Saving(s)?

Brian Handwerk

for National Geographic News

Updated March 13, 2011

With daylight saving time (also called daylight savings time) kicking off again, clock confusion is once again ticking away: Why do we spring forward? Does daylight saving time really save energy? Is it bad for your health? Get expert answers below.

When Did Daylight Savings Begin in 2011?

For most Americans, daylight saving time 2011 started at 2 a.m. on Sunday, March 13, when most states sprang forward an hour. Time will fall back to standard time again on Sunday, November 6, 2011, when daylight saving time ends.

The federal government doesn't require U.S. states or territories to observe daylight saving time, which is why residents of Arizona, Hawaii, Puerto Rico, the Virgin Islands, American Samoa, Guam, and the Northern Marianas Islands won't need to change their clocks this weekend.

Where it is observed, daylight savings has been known to cause some problems.

National surveys by Rasmussen Reports, for example, show that 83 percent of respondents knew when to move their clocks ahead in spring 2010. Twenty-seven percent, though, admitted they'd been an hour early or late at least once in their lives because they hadn't changed their clocks correctly.

It's enough to make you wonder—why do we do use daylight saving time in the first place?

How and When Did Daylight Saving Time Start?

Ben Franklin—of "early to bed and early to rise" fame—was apparently the first person to suggest the concept of daylight savings, according to computer scientistDavid Prerau, author of the book Seize the Daylight: The Curious and Contentious Story of Daylight Saving Time.

While serving as U.S. ambassador to France in Paris, Franklin wrote of being awakened at 6 a.m. and realizing, to his surprise, that the sun would rise far earlier than he usually did. Imagine the resources that might be saved if he and others rose before noon and burned less midnight oil, Franklin, tongue half in cheek, wrote to a newspaper.

"Franklin seriously realized it would be beneficial to make better use of daylight but he didn't really know how to implement it," Prerau said.

It wasn't until World War I that daylight savings were realized on a grand scale. Germany was the first state to adopt the time changes, to reduce artificial lighting and thereby save coal for the war effort. Friends and foes soon followed suit.

In the U.S. a federal law standardized the yearly start and end of daylight saving time in 1918—for the states that chose to observe it.

During World War II the U.S. made daylight saving time mandatory for the whole country, as a way to save wartime resources. Between February 9, 1942, and September 30, 1945, the government took it a step further. During this period daylight saving time was observed year-round, essentially making it the new standard time, if only for a few years.

Since the end of World War II, though, daylight saving time has always been optional for U.S. states. But its beginning and end have shifted—and occasionally disappeared.

During the 1973-74 Arab oil embargo, the U.S. once again extended daylight saving time through the winter, resulting in a one percent decrease in the country's electrical load, according to federal studies cited by Prerau.

Thirty years later the Energy Policy Act of 2005 was enacted, mandating a controversial monthlong extension of daylight saving time, starting in 2007.

But does daylight saving time really save any energy?

Daylight Saving Time: Energy Saver or Just Time Suck?

In recent years several studies have suggested that daylight saving time doesn't actually save energy—and might even result in a net loss.

Environmental economist Hendrik Wolff, of the University of Washington, co-authored a paper that studied Australian power-use data when parts of the country extended daylight saving time for the 2000 Sydney Olympics and others did not. The researchers found that the practice reduced lighting and electricity consumption in the evening but increased energy use in the now dark mornings—wiping out the evening gains.

Likewise, Matthew Kotchen, an economist at the University of California, saw inIndiana a situation ripe for study.

Prior to 2006 only 15 of the state's 92 counties observed daylight saving time. So when the whole state adopted daylight saving time, it became possible to compare before-and-after energy use. While use of artificial lights dropped, increased air-conditioning use more than offset any energy gains, according to the daylight saving time research Kotchen led for the National Bureau of Economic Research[PDF] in 2008.

That's because the extra hour that daylight saving time adds in the evening is a hotter hour. "So if people get home an hour earlier in a warmer house, they turn on their air conditioning," the University of Washington's Wolff said.

In fact, Hoosier consumers paid more on their electric bills than before they made the annual switch to daylight saving time, the study found.

(Related: "Extended Daylight Saving Time Not an Energy Saver?")

But other studies do show energy gains.

In an October 2008 daylight saving time report to Congress (PDF), mandated by the same 2005 energy act that extended daylight saving time, the U.S. Department of Energy asserted that springing forward does save energy.

Extended daylight saving time—still in practice in 2011—saved 1.3 terawatt hours of electricity. That figure suggests that daylight saving time reduces annual U.S. electricity consumption by 0.03 percent and overall energy consumption by 0.02 percent.

While those percentages seem small, they could represent significant savings because of the nation's enormous total energy use.

What's more, savings in some regions are apparently greater than in others.

California, for instance, appears to benefit most from daylight saving time—perhaps because its relatively mild weather encourages people to stay outdoors later. The Energy Department report found that daylight saving time resulted in an energy savings of one percent daily in the state.

But Wolff, one of many scholars who contributed to the federal report, suggested that the numbers were subject to statistical variability and shouldn't be taken as hard facts.

And daylight savings' energy gains in the U.S. largely depend on your location in relation to the Mason-Dixon Line, Wolff said.

"The North might be a slight winner, because the North doesn't have as much air conditioning," he said. "But the South is a definite loser in terms of energy consumption. The South has more energy consumption under daylight saving."

(See in-depth energy coverage from National Geographic News.)

Daylight Saving Time: Healthy or Harmful?

For decades advocates of daylight savings have argued that, energy savings or no, daylight saving time boosts health by encouraging active lifestyles—a claim Wolff and colleagues are currently putting to the test.

"In a nationwide American time-use study, we're clearly seeing that, at the time of daylight saving time extension in the spring, television watching is substantially reduced and outdoor behaviors like jogging, walking, or going to the park are substantially increased," Wolff said. "That's remarkable, because of course the total amount of daylight in a given day is the same."

But others warn of ill effects.

Till Roenneberg, a chronobiologist at Ludwig-Maximilians University in Munich, Germany, said his studies show that our circadian body clocks—set by light and darkness—never adjust to gaining an "extra" hour of sunlight to the end of the day during daylight saving time.

"The consequence of that is that the majority of the population has drastically decreased productivity, decreased quality of life, increasing susceptibility to illness, and is just plain tired," Roenneberg said.

One reason so many people in the developed world are chronically overtired, he said, is that they suffer from "social jet lag." In other words, their optimal circadian sleep periods are out of whack with their actual sleep schedules.

Shifting daylight from morning to evening only increases this lag, he said.

"Light doesn't do the same things to the body in the morning and the evening. More light in the morning would advance the body clock, and that would be good. But more light in the evening would even further delay the body clock."

Other research hints at even more serious health risks.

A 2008 study in the New England Journal of Medicine concluded that, at least in Sweden, heart attack risks go up in the days just after the spring time change. "The most likely explanation to our findings are disturbed sleep and disruption of biological rhythms," lead author Imre Janszky, of the Karolinska Institute's Department of Public Health Sciences in Stockholm, told National Geographic News via email.

(Related: "Leap Year: How the World Makes Up for Lost Time.")

Daylight Savings Lovers, Haters

With verdicts on the benefits, or costs, of daylight savings so split, it may be no surprise that the yearly time changes inspire polarized reactions.

In the U.K., for instance, the Lighter Later movement—part of 10:10, a group advocating cutting carbon emissions—argues for a sort of extreme daylight savings. First, they say, move standard time forward an hour, then keep observing daylight saving time as usual—adding two hours of evening daylight to what we currently consider standard time.

The folks behind Standardtime.com, on the other hand, want to abolish daylight saving time altogether. Calling energy-efficiency claims "unproven," they write: "If we are saving energy let's go year round with Daylight Saving Time. If we are not saving energy let's drop Daylight Saving Time!"

But don't most people enjoy that extra evening sun every summer? Even that remains in doubt.

National telephone surveys by Rasmussen Reports from spring 2010 and fall 2009 deliver the same answer. Most people just "don't think the time change is worth the hassle." Forty-seven percent agreed with that statement, while only 40 percent disagreed.

But Seize the Daylight author David Prerau said his research on daylight saving time suggests most people are fond of it.

"I think the first day of daylight saving time is really like the first day of spring for a lot of people," Prerau said. "It's the first time that they have some time after work to make use of the springtime weather.

"I think if you ask most people if they enjoy having an extra hour of daylight in the evening eight months a year, the response would be pretty positive."

New Taxes for Georgians

After two months of working behind the scenes, it’s decision time for lawmakers on state taxes.

In coming weeks, legislators will decide whether to vote on a comprehensive plan to rewrite Georgia’s tax code, a proposal that could lead to higher taxes on groceries, cigarettes, person-to-person car sales and services. The proposal also would lower income taxes for most Georgians.

Or legislators will decide whether to vote on bits and pieces of the plan.

To gauge support — or lack of support — for the plan, The Atlanta Journal-Constitution interviewed 20 lawmakers last week on six key parts of the proposal. Most support lowering income taxes, but many lawmakers acknowledged that the state also needs to raise enough revenue to pay for services like schools and health care.

“It has to be balanced,” said Rep. Don Parsons, R-Marietta. “We can’t have a bunch of cuts in taxes without trying to balance it somehow.”

Putting off the tax-code reform during the 2011 session might kill the idea for a while. Few lawmakers will want to address it in 2012, an election year for all 236 lawmakers.

But many of those interviewed by the AJC argued that the state tax code has to change with the times.

“We have an income tax code from the Depression, we have a sales tax code from the 1950s, and we’re now starting the second decade of the 21st century,” said state Sen. Doug Stoner, D-Smyrna.

PROPOSED CHANGES

Grocery tax

Lawmakers were split on this issue, with more Republicans than not willing to consider it if paired with lowering income taxes. Democrats generally oppose it.

The plan calls for the state to begin charging its 4 percent sales tax on all groceries. Supporters say it is a tax everybody — including those who don’t file state income tax returns — would pay.

“It would be the most consistent source of revenue. Everybody has to eat,” said Sen. Butch Miller, R-Gainesville.

But Democrats worry that it would most hurt the poor and middle class, who spend a greater portion of their income on food.

Sen. Vincent Fort, D-Atlanta, said he couldn’t vote for any bill that included a grocery tax. “No, absolutely never,” he said.

Not all Republicans are sold on it either. “I don’t vote for tax increases,” Rep. Alan Powell, R-Hartwell, said when asked about it.

Income tax on retirees

The plan calls for the state to eliminate exemptions on certain non-work income, such as investments and pensions, for senior citizens. It would not affect Social Security or most disability payments.

Under state law, the first $35,000 per person, or $70,000 per couple, of non-work income for seniors is exempt. Starting in 2012, the state will begin completely phasing out taxes on seniors for non-work income.

Lawmakers were mixed on the issue. Some said there was no way they would take the exemption away from seniors. Others said it needs to be considered.

Rep. Nikki Randall, D-Macon, said she might support keeping the exemption for lower-income seniors.

“Some seniors have a whole lot more in investments than others, so I think it should be means-tested,” she said.

But Cooper said lawmakers would be breaking a promise they made in recent years to seniors if they eliminated the tax break.

“I have real trouble when they make promises to people and then renege on those promises,” she said.

Income tax

The tradeoff for raising grocery and other taxes would be a drop in state income taxes, from a top rate of 6 percent to 4 percent or less.

Republicans have long argued that the state should be taxing things people buy or spend money on instead of the income they earn.

“I would like to see a greater reduction in income taxes and a move solely toward a consumption tax,” said Rep. Tim Bearden, R-Villa Rica. “I would like to basically see an elimination of the income tax.”

Opponents say the tradeoff would result in the poor and lower middle class paying more in taxes.

“I think in reality, if we are going to tax groceries, for someone earning $50,000 a year, they will pay more in sales taxes than the reduction they receive in income taxes,” Stoner said. “I don’t think that has been well thought out.”

Taxes on services

The tax council has proposed extending Georgia’s 4 percent sales tax to a host of services never before taxed, including veterinary procedures, tire rotation, haircuts and country club memberships and dozens more.

While the issue is far from settled, two-thirds of Republicans surveyed either were opposed to taxing services or were undecided.

“My wife is a hairdresser. It will impact me and my family personally,” Rep. Brett Harrell, R-Snellville, said.

Like many Republicans, Harrell said he is concerned that many will see it as a tax hike on families and would only support it if balanced with income tax cuts.

Rep. Ben Harbin, R-Evans, said he did not think the idea had much traction with voters. “The thought of having to pay taxes on haircuts, or pay taxes on services ... people just aren’t comfortable with that,” he said.

Others said the idea is at least worth considering.

“Desperate times call for desperate measures,” Randall said. “It’s obvious that our state is going through some desperate times.”

Cigarette tax

The tax council recommends Georgia’s 37-cent tax on a pack of cigarettes be raised to 68 cents. The proposed tax is an average of the surrounding states, but it would be the second highest next to Florida’s $1.34.

Opinion is split among lawmakers on raising the tax, with a slight edge toward approving an increase. Democrats generally support increasing the tax, which is among the nation’s lowest. Republican sentiment is more divided.

“I’m against any tax increase,” said Rep. Mark Hatfield, R-Waycross, summarizing the feelings several GOP lawmakers surveyed.

Pak said he could support increasing the tax if it was part of an effort to reduce health care costs by discouraging smoking. But there is a limit, he said.

“I think the American Cancer Society wanted to raise it a dollar, but if you raise it a dollar you are going to kill businesses on the border,” he said.

Rep. Sharon Cooper, R-Marietta, said she would support raising the tax because she believes it would result in fewer young people starting smoking.

“I’m a nurse. I’ve held people’s hands when they are dying, gasping for breath,” she said.

Casual sales tax

The plan recommends the state collect sales tax on private sales of cars, boats and airplanes. The tax already is collected from dealers.

The tax council believes it could generate about $150 million in state taxes annually, but many legislators have yet to form a hard opinion on it.

Rep. Ron Stephens, R-Savannah, said he could support the tax as part of a comprehensive overhaul.

“Auto dealers are at a competitive disadvantage under the current system,” he said.

Rep. B.J. Pak, R-Lilburn, said he has not made up his mind, but said it would be hard to hit people with a big tax bill when they go to register their car.

“It just seems inherently unfair to do that,” he said.

http://www.ajc.com/news/georgia-politics-elections/lawmakers-talk-tradeoffs-861637.html

Smoke em if ya got em!

ATLANTA — Georgia lawmakers are considering hiking the state's tax on cigarettes from 37 cents to 68 cents per pack, making it one of the highest in the region.

The 84 percent increase is part of a plan set out by the Special Council on Tax Reform and Fairness for Georgians to revamp the state's tax code. The increased tax on smokes would create another $114 million in revenue for the cash-strapped state.

The state's cigarette tax has been 37 cents since 2003, when it was raised 12 cents.

The increase would still keep Georgia among the lowest cigarette taxes in the country. In New York, the tax alone is $4.35, while in Rhode Island it's $3.46 and Michigan it's $2.52.

Georgia: Personal services may face 1st-time tax

By Chris Joyner

The Atlanta Journal-Constitution

5:17 a.m. Monday, February 28, 2011

Kerry Guthrie believes she pays enough taxes.

The owner of My Favorite Mechanic near Candler Park already pays income taxes, payroll taxes, recycling fees and sales tax on auto parts. So she is less than thrilled with a proposal in the Georgia General Assembly to tack a new sales tax onto the labor cost of auto repairs and dozens of other services.

“The amount of tax money I pay out of this place on a weekly basis,” she said, shaking her head. “People already fuss about how much a car repair is.”

Services are excluded from Georgia’s 4 percent sales tax. But a special council convened to rewrite the state’s tax code has called for the state to move away from income taxes and toward consumption taxes. As part of that move, the council recommended that about 50 personal services be taxed for the first time, including haircuts, country club and health club membership fees, shoe repair, veterinary services, lawn care and watch repair.

The problem, as members of the Special Council on Tax Reform and Fairness see it, is that services have become a larger portion of the state economy over the years. That shift means more of the tax burden is placed on businesses that sell goods, and the tax council concluded that is not fair.

It also does not provide a broad enough revenue base for the state, the council concluded in its January report. The state collected nearly $1 billion less in sales taxes in fiscal 2010 than it did four years earlier.

“Not taxing many services means that the tax base has become increasingly narrow, requiring a higher tax rate to obtain the same revenue, and providing an incentive to purchase services rather than tangible property," the council concluded.

David Sjoquist, a Georgia State University economist and tax council member, said the council weighed a number of factors in deciding which services should be taxed.

The council did not want to tax businesses that could leave the state to escape paying them. Most consumer services have to be where the consumers are, as with pest control, he said.

"You can’t really export that,” he said.

Ditto for things like garbage pickup, septic tank cleaning and dry cleaning fees, all of which are on a list of proposed services to be taxed.

The cost to consumers would not be insignificant. If the proposal is adopted as part of an overall approach to tax reform, the addition of a 4 percent sales tax on services is expected to generate $298 million in new revenue for the state. Local governments would add another 3 percent, or 4 percent for the city of Atlanta.

The council said the increase in state sales taxes would be offset by cutting income tax rates by a third over the next three years. But some are skeptical, including Guthrie.

“Just like they were taking the toll off Ga. 400?” she said. “Once it gets set, it doesn’t go away, man.”

Sjoquist said the council is aware the idea is not universally popular, and he acknowledges that collecting taxes on services like haircuts will not be easy.

“A lot of those people are set up as independent contractors and are just leasing the chair,” he said. “You are dealing with lots and lots of small businesses, which is a potential administrative problem, but other states do it.”

The proposal would require a lot of small businesses to start collecting taxes and turning them over the state, meaning new forms and filings for small-time outfits like independent lawn cutters or plumbers. Sjoquist concedes that the new taxes could make tax cheats out of some of these businesses if they did not collect the tax.

“With any very small business there is always that problem," he said.

Some smaller operators who rely on licenses from the state could be tracked down and forced to pay, he said. But he said the state revenue commissioner also has the power to exempt some businesses that account for an insignificant amount of proposed tax.

The council did recommend that some services, like babysitting, not be taxed because it would cost more for the state to collect the tax than it would collect.

Some just do not think the proposal is fair. Sherrie Jones, office manager for Inman Park Animal Hospital, first heard about the proposal to add sales tax to vet bills from the Georgia Veterinary Medical Association, which sent out a legislative alert urging members to mobilize against the plan.

"I was absolutely appalled," Jones said. "I don't feel there should be a tax on services, period."

Jones said she her state representative a message saying so. In addition, Jones said, the proposal calls for taxing health care for animals but not for people. That's not fair, she said.

"It just seems the politicians are not in contact with what is going on in the real world," she said. "You've got people making decisions on how to run a small business who have never done it."

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The list

Here is the complete list of services the tax council proposes to tax

Clothing services

• Shoe repair, other shoe services
• Repair, alteration, tailoring
• Watch or jewelry repair
• Clothing storage

Household utilities

• Garbage pickup
• Septic tank cleaning
• Water softening

Other household services

• Household appliance/equipment service contracts
• Housekeeping services
• Gardening/lawn care
• Household appliance/equipment repair
• Other home services and small repair jobs around the house
• Home security system service fees
• Installation charges for home electronics

Miscellaneous

• Moving, storage and freight expenses
• Laundry and dry cleaners
• Professional photography fees
• Pet services
• Veterinary expenses
• Haircuts, styling, related services
• Safe deposit box rental
• Downloads of books, music, etc.

Membership fees

• Global positioning services (GPS) such as OnStar
• Golf courses, country clubs and other social organizations, health clubs, swimming pools, fitness and weight-loss centers
• Credit card membership
• Shopping club membership (Sam’s, Costco, etc.)
• Direct or online dating services

Vehicle maintenance, repairs

• Tire purchases and mounting
• Audio equipment and installation
• Video equipment and installation
• Body work and painting
• Clutch or transmission work
• Drive shaft or rear-end work
• Brake work
• Steering or front-end work
• Engine cooling system work
• Motor tune-up
• Oil change, lubrication, oil filter
• Front-end alignment, wheel balancing, wheel rotation
• Shock absorber replacement
• Battery purchase, installation
• Tire repair
• Exhaust system work
• Electrical system work
• Engine repair or replacement
• Vehicle accessories and customization
• Vehicle cleaning services and supplies

Other vehicle-related expenses

• Auto repair service policies
• Towing charges
• Automobile service clubs