Hillary Clinton’s Reverse Robin Hood Tax Code

Today, multimillionaire presidential candidate Hillary Rodham Clinton held a “grassroots event” with billionaire investor Warren Buffett.

The subject was tax reform, one Buffett knows well. The Berkshire Hathaway CEO owns a sprawling enterprise of businesses employing an army of lobbyists and accountants to exploit opportunities to make money at taxpayer expense.

Buffett does not hide this strategy. In fact, he brags about his ability to game the system. In a speech last year, Buffett mentioned how he (ab)uses the tax code to make money on unprofitable wind turbines:

“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate. For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

Buffett is referring to the wind Production Tax Credit (PTC). The wind PTC is a massive wealth transfer from ordinary taxpayers to rich investors like Buffett and large companies like Berkshire Hathaway and General Electric.

This lucrative subsidy pays the wind industry to generate electricity whether it is wanted or needed. And it’s often unwanted, since wind energy is expensive and unreliable. It raises energy prices on American families and makes our power grid less dependable.

The wind PTC is also crucial for President Obama’s climate agenda. His central domestic climate policy, the “Clean Power Plan,” banks on rapidly expanding wind energy production over the coming decades. But as Buffett explained, wind energy doesn’t “make sense” without subsidies because it is uneconomic.

Worse still, this subsidy has been hanging around for more than two decades. Congress first passed it in 1992 as a “temporary” handout to an infant industry. Now the wind industry claims it’s “mature,” yet the PTC remains.

The infant wind industry has grown into a 23-year old unemployed college grad who doesn’t want to leave the “safe space” of his parents’ house. Instead of leaving the nest to face the real world, wind lobbyists guilt Congress into letting the free-ride continue.

The wind PTC is routinely included in a package of expired tax provisions known as tax extenders. For years, the PTC has skated by on the political popularity of the total extenders package despite controversy over individual provisions. And just recently, Congressional leaders unveiled an omnibus spending bill that would extend the PTC for five years—costing taxpayers billions of dollars.

When people talk about “tax reform” they generally mean cutting the number of tax write offs, including the PTC, while reducing tax rates across the board. In theory, a simpler tax code achieved through tax reform would negate the need for annual extenders or attaching tax subsidies to a massive spending bill.

But political expediency tends to beat good policy, as it did once again with the omnibus bill.

This brings us to the Clinton – Buffett “tax reform” event. People like Buffett profit off a complicated tax code. Big companies hire accountants to search for tax carve outs, which their lobbyists then fight to keep and expand. Most people, including the “grassroots” audience attending Clinton’s event, can’t possibly keep up.

As a result, the current tax code benefits the rich and leaves everyone else behind. It rewards rich guys like Buffett who invest in wind turbines for the sole purpose of collecting subsidies—even though those subsidies raise energy prices on poor and middle class families.

The current tax code also favors the political class. It allows politicians to reward the special interests that fund their campaigns with special tax treatment, paid for by American families. Hillary Clinton, for example, has pledged to power every home with wind and solar by 2030, a 700 percent increase in installed solar capacity. To reach that goal, she’s calling for expanded tax subsidies like the PTC, among a slew of other subsidies and mandates.

It makes sense, then, why Clinton and Buffett are joining forces on tax policy. As much as Clinton claims to support “hardworking families,” her interests are more aligned with a robber baron and his wind farms.