Polluting robots win big, clean energy workers get screwed in Trump tax bill

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Think Progress


Ivanka Trump presses the button on a robot at the start of the global entrepreneurship summit in India, Nov 27 2017. Credit: AP/Manish Swarup 

Polluting robots of the world, unite! The GOP tax bill is for you.

The rest of us, however, have a lot to lose from GOP tax changes that favor investments in dirty energy over clean — and robots over human workers.

As one MIT economist told Newsweek, “We are creating huge subsidies in our tax code for capital and encouraging employers to use machines instead of labor.” And unless significant changes are made in the GOP plan, those machines will be running on dirty energy.

Last month, I discussed how the House tax bill targets key solar and wind energy tax credits that have helped make clean energy a crucial high-wage job-creating sector in the United States.

The good news is that the Senate tax bill doesn’t roll back those renewable energy tax credits.

The bad news is that it contains language that could seriously undermine the investment in renewables by imposing “a new 100 percent tax” on those credits, as Gregory Wetstone, head of the American Council on Renewable Energy, explained in a statement.

“If this bill passes as drafted, major financial institutions would no longer participate in tax equity financing, which is the principal mechanism for monetizing credits,” Wetstone pointed out.

“Almost overnight, you would see a devastating reduction in wind and solar energy investment and development.” Meanwhile, tax subsidies for fossil fuels, many of which are decades old, would continue unchanged–and the Senate bill opens up the Arctic National Wildlife Refuge to drilling.

This type of clean energy financing will reach $12 billion this year, according to Bloomberg New Energy Finance, which examined the impact of this change in detail.


This investment, much of it by multinational finance companies, has helped leveraged some $50 billion a year in U.S. wind and solar projects, creating hundreds of thousands of jobs.

Ironically — or, rather, tragically — harming renewables mostly harms red states. As “The American Prospect” noted, “The states that voted for Trump produce nearly 70 percent of wind energy, while 85 percent of existing wind projects are in GOP-held congressional districts.”

As for longer-term impacts, the GOP plan would cut billions of dollars in incentives for  the biggest new source of sustainable high-wage employment in the world — clean energy — just as China and the rest of the world are making massive investments.

What’s unknown at this point is how these and other changes to these tax credits will be dealt with in the final bill, after the House and Senate work out their differences. While the House plan to gut the credits was intentional, it’s not clear that Senators intended to undermine them, so the problem is fixable.

One thing that was very intentional was the “full and immediate expensing of equipment purchases” provision. This would let companies deduct from their taxes the full cost of some types of investments, such as new industrial equipment, that are currently only allowed a 50 percent deduction.

This change would occur just when companies are beginning to automate their factories using robots and advanced computing technology, as corporate tax attorney Robert Kovacev, explained to Huffington Post: “It’s going to accelerate spending, basically, on robots that could displace workers.”

The GOP plan naturally has no tax incentives to encourage businesses to hire more actual workers or to retrain those who lose their job due to automation

Indeed, the Senate bill is so bad that Bloomberg’s editors wrote a piece explaining “Republicans have managed to make a terrible plan worse.” As one example the equipment-expensing provision would take effect immediately, but the Senate only lowers the corporate tax rate to 20 percent (from 35) in 2019.

“This will allow businesses to take deductions on investments while rates are high, then pay a lower rate on the resulting income, creating a perverse incentive to pursue otherwise unprofitable projects,” explains Bloomberg.

So the Senate bill actually encourages companies to replace workers even with unprofitable robots.

Unprofitable polluting robots — quite a legacy for the disastrous GOP tax plan.

Source: Think Progress. Reproduced with permission.  

  • trackdaze

    Will crash the economy. Shades of 29

  • George Darroch

    I’m not opposed to robots. They don’t care where their electrons are sourced.

    And this will grow the economy. The question is how the profits are distributed.

  • Radbug

    My name is Donald Trump, look upon me, oh ye mighty, and despair!

  • Mark Roest

    Actually, this will make it less expensive to build new battery, solar and wind factories, which will already produce less-expensive products, which will amortize even more quickly from the savings, which will mean free electricity even sooner, which, since energy is 10% of global GDP now, will mean, effectively, on average, a 10% cut in the cost of goods and services produced with that energy. That 10% can then be invested in energy efficiency and whole new approaches to ‘things’, which also use less energy and less materials (hence yet more reduction in cost and energy and CO2).
    That is the logical potential outcome, if and only if we pay attention, and take advantage of the logic by taking ACTION!

    • nakedChimp

      That’s the thing with capitalism driving markets to saturation.. no profits anymore, due to saturation.
      Only way to generate profits is via artificial shortages.. IP, products, monopolies.. and well, that’s where they will overestimate their reach and get called out on at least.
      Robots won’t buy stuff made by robots, humans do.
      Once all work is been taken over by machines that are wholly owned by the 0.01% and they try to keep the 99.99% at no-life-support, they will revolt (probably way earlier).
      And if you don’t want to corner a wild animal, you definitely don’t want to corner naked chimps. Bad mistake.

  • Mark Roest

    As far as GOP class-war politics goes, check out the ‘bill of materials’
    Who does this remind me of? Name starts with A? (only more so!)