Deep thought required
Some days we can't make sense of it all. See if you can help us figure this one out. The Oregon tax department is auctioning off tax credits on the internet. Each credit is worth $1,000 off your Oregon income tax, and bidding starts at $950. Bids will be open for nine days.
The money that the auction takes in will be spent by the state on "green" stuff. It's reported that there will be $1.1 million of tax credits auctioned off, and so apparently there will be 1,100 credit certificates sold.
Assuming that the bidding will move up from $950, it's hard to see why it would be worth most people's time and effort to get involved in bidding. And what's in it for the state? If the top bid is, say, $990, the state loses $11,000 in revenue, plus whatever administrative costs it's incurring running the auction and sending out credit certificates. Then there's the added cost of processing the certificates when they show up with tax returns next year.
Wouldn't it have been a whole lot simpler just to hand out grants to worthy "green" projects out of general tax revenues, and skip all the auction folderol? Maybe we should ask the people who dreamed the whole thing up. Probably some responsible adults like Jefferson Smith.
| Posted at 3:24 PM | Permalink |
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Comments (17)
Brain damage eclipse.
Posted by Mojo | November 30, 2011 3:34 PM
Wouldn't it have been a whole lot simpler just to hand out grants to worthy "green" projects out of general tax revenues, and skip all the auction folderol?
a) Them "worthy" projects might be a little hard for state workers to recognize. They're conditioned to dole pork to the chosen (rarely worthy) few.
2) When has "simple" ever motivated gubmint types?
Posted by cc | November 30, 2011 3:46 PM
Creative financing. Cash now instead of later.
Posted by Joe | November 30, 2011 3:47 PM
Cash in December -- three or four months early -- is worth all the administrative expense, plus the discount?
Posted by Jack Bog | November 30, 2011 3:52 PM
WTF?
One of the documents on their site says up to 1,094 credit certificates will be issued.
Seems like such a small discount for the necessary work/risk for a normal person. Maybe a large business that owed a bunch of tax could save enough to make it worth the effort and expense.
Posted by Michael | November 30, 2011 4:07 PM
Oregon probably saw that SolarWorld sold about $10M worth of Oregon Energy tax credits to WalMart for $7M and thought they should get in on the game.
I'd be really curious how many people fall for this "paying your future taxes now" game. I mean why would you pay $1000 in 2011 money for a $1000 2015 tax credit?
Then again they are the only entity in the state that actually believes the Oregon Lottery is used for investment purposes.
Posted by Steve | November 30, 2011 4:51 PM
The other issue is using this as a way to get around funding limits (I think). I mean if you pay $1000 that goes into "clean" energy projects from the state, this means Oregon collects $1000 less for general revenues later.
Which means they take it out of schools and roads (I can guarantee this won't affect employee benefits).
Something doesn't smell right about it. Of course, that smell is swamped by the general miasma from the Capitol anyways.
Posted by Steve | November 30, 2011 4:56 PM
I mean why would you pay $1000 in 2011 money for a $1000 2015 tax credit?
Especially since by 2015 it may be worth $300 in today's money - or less. Break out the wheelbarrow, Maw - I'm heading to the store for a loaf of bread!
Posted by Max | November 30, 2011 5:40 PM
Why doesn't Oregon State start selling assets and just do business as usual? I know most state agencies would have a negative retail value, but sell them now while we can get a discount on foreign exchange rates.
Posted by dhughes609 | November 30, 2011 5:51 PM
Didn't the star try this earlier and it failed so now they are in "do over" mode.
Oregon needs to lure the state treasurer from Rhode Island. That lady has done the impossible there.
Posted by Portland Native | November 30, 2011 6:22 PM
They should sell the naming rights to the highways, maybe even the rivers, even the naming rights to Mt. Hood. Why is it even named after an English bone head to begin with?
Portland could lead the nation by selling the naming rights to various streets. They ever get any money for Washington Street? Of course not. Maybe it should be the Sam Adams Street?
Posted by Evergreen Libertarian | November 30, 2011 7:01 PM
We are lucky that Salem doesn't have the right to print money, only borrow it. We would quickly become Zimbabwe of the West.
How many state employees are required to "manage" this scam?
Posted by Mister Tee | November 30, 2011 7:18 PM
Where are you guys coming up with using the credits in 2015? From what I can tell they are good for 2011-2014 taxes.
Posted by Michael | November 30, 2011 8:52 PM
Cap and trade training and PR game. Press release to follow saying that demand for green credits outstripped supply, quoting supplicants gushing on how good it felt to give the government money and save the environment -- almost as much fun as going by streetcar.
Posted by Newleaf | November 30, 2011 11:31 PM
Where are you guys coming up with using the credits in 2015?
It doesn't really matter, I was being extreme. The point is why pay taxes now (by buying credits) you can pay later (2012-2015 when 2011-2014 taxes are due)?
I still don't see any sense behind it besides a money for some more subsidies to green energy schemes.
Posted by Steve | December 1, 2011 6:31 AM
Ha ha. It's like Groupon for the green energy set.
Posted by MJ | December 1, 2011 2:18 PM
From the Acution Form: "Cash and personal checks are not acceptable forms
of payment."
I do not believe a public agency can refuse Cash. Isn't that full faith and credit violation?
Posted by Skamaniac | December 2, 2011 3:29 PM