Biofuels: The World’s Regressive Tax
Nicolas Loris /
The rise in gas prices is reducing the American consumer’s disposable income, forcing a choice between filling up the tank and going out to dinner or taking a trip to the movie theater. But policy implementations in developed countries are doing much more damage internationally, like pushing 30 million people into poverty.
That’s the latest number, according to Oxfam International, a confederation of 13 organizations that seek to alleviate poverty worldwide. It boils down to a combination of special interest politics and simple economics, says Oxfam’s biofuel policy adviser Rob Bailey:
If the fuel value for a crop exceeds its food value, then it will be used for fuel instead. Thanks to generous subsidies and tax breaks, that is exactly what is happening.”
Even worse, Members of Congress have blocked the importation of Brazilian ethanol through protectionist tariffs. Given the fact that Brazilian ethanol is much less damaging to global food security, the tariff only exacerbates the problem. Removing all mandates and lifting all barriers is a necessary step to allow the food value to compete with ethanol’s fuel value.
The critics of biofuel policy continue to build and now far outweigh the supporters. Before we push millions more into poverty, Congress should take a hard, honest look at America’s ethanol policy, and the mandate should be repealed, along with the tax breaks and protectionist tariffs.