The Reverse Robin Hood


Kaleigh Cober-Final Draft
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At their core, various federal energy programs were implemented in hopes of achieving goals such as diminishing climate change and reducing our dependence on foreign energy sources.[1] Federal clean energy and vehicle tax incentives are strong contenders for boosting our economy and bolstering a strong American workforce.[2] The tax credits offered work to level the playing field between the reigning fossil fuel industry and the growing clean energy industry.[3] Yet, these programs often lead to a reverse Robin Hood effect: stealing from the poor giving to the rich.

With the federal government getting involved in the energy business, they turn their focus and their pockets towards the “production and consumption of politically preferred sources and technologies.”[4] Why focus on a lower-income American when the subsidies could benefit wealthy individuals and the corporations that the individual backs? Through blatant corporate welfare, the majority of energy-related tax code provisions are aimed towards businesses, not households.[5]

In analyzing the four most significant clean energy tax credits, it is exceedingly apparent that high-income individuals are favored. The top four credits that are applied to households are The Nonbusiness Energy Property Credit, The Residential Energy Efficient Property Credit, The Alternative Motor Vehicle Credit, and The Qualified Plug-in Electric Drive Motor Vehicle Credit.[6] Each of these credits are overwhelmingly claimed by high-earning Americans. To put into perspective, the credit for electric vehicles has the top 20 percent of taxpayers claiming 90 percent of all the available credits.[7] Due to the high price of electric vehicles, Americans with a lower net income are not able to access the $7,500 tax credits, even with the generous subsidies they would receive accounted for.[8] This creates a reverse Robin Hood effect of these programs helping the rich at the expense of the poor. Individuals pay these subsidies with their taxes, but they aren’t able to reap the benefits of them—e.g., carpool lanes—or even be eligible for the subsidies themselves.[9]

At the expense of lower- and middle-income Americans, the majority of federal tax codes that have clean energy credits that are severely disproportionately claimed by high-income individuals.[10] A study conducted by the Pacific Research Institute unveiled that not only does, “more than 99 percent of subsidies for electrical vehicles go to households with $50,000 or higher,” but the scales are heavily in favor of high-earning Americans, as “nearly three-quarters [of that 99 percent] go to households with an annual income of $100,000 or more.”[11] With the bulk of Americans falling within the lower- and middle-income range, the majority of Americans aren’t receiving these benefits. Further, since 2006, “the bottom three income quintiles have received about 10 percent of all credits,” that relate to clean energy investments, “while the top quintile has received about 60 percent.”[12] How the federal government frames these incentives and programs may be helping the environment, but how they negatively impact the majority of Americans needs to be revisited and repaired.

In Arizona specifically, the state chips in an additional $1.2 billion in solar panel subsidies towards Congress’ Solar Investment Tax Credit.[13] These subsidies promote home and business solar panel ownership, making them more affordable for Arizonans.[14] Yet, in accordance with most clean energy initiatives, they have benefited the rich rather than the poor. The programs have contributed to, “the rise of solar panel leasing companies owned by well-connected billionaires,” and have left out Arizonans living in poverty from receiving benefits yet again.[15] The reason being that solar panels cannot be installed in apartment buildings or government housing. Low-income Arizonans are further disadvantaged due to net metering. When solar panel users produce excess power, their utility purchases the excess but doesn’t cover the additional cost to create power and maintenance… ergo falling onto individuals without solar panels.[16]

Those who do not have the means to purchase solar panels should not be penalized for the lack thereof, nor obligated to pay for the additional fees to purchase excess power. Not only the specified Arizona programs, but also the federally funded clean energy tax initiatives should eliminate favoritism in markets in order to benefit all Americans.[17] If we truly want to diminish climate change and reduce our dependence on foreign energy sources, we need to put a stop to the reverse Robin Hood effect occurring in federal energy programs.

[1] Loris, Nicolas. “How 'Green' Energy Subsidies Transfer Wealth to the Rich.” The Heritage Foundation, 18 July 2018, www.heritage.org/energy-economics/commentary/how-green-energy-subsidies-transfer-wealth-the-rich. [2] Noll, Elizabeth. “Clean Energy Jobs vs. Tax Cuts for the Rich.” Natural Resources Defense Council (NRDC), 19 Oct. 2017, www.nrdc.org/experts/elizabeth-noll/clean-energy-jobs-vs-tax-cuts-rich. [3] Ibid. [4] Loris, Nicolas. “How 'Green' Energy Subsidies Transfer Wealth to the Rich.” [5] Greenberg, Scott. “Clean Energy Credits Mostly Benefit the Wealthy, New Study Shows.” Tax Foundation, 21 Aug. 2015, taxfoundation.org/clean-energy-credits-mostly-benefit-wealthy-new-study-shows/. [6] Ibid. [7] Ibid. [8] Loris, Nicolas. “How 'Green' Energy Subsidies Transfer Wealth to the Rich.” [9] Ibid. [10] Greenberg, Scott. “Clean Energy Credits Mostly Benefit the Wealthy, New Study Shows.” [11] Loris, Nicolas. “How 'Green' Energy Subsidies Transfer Wealth to the Rich.” [12] Greenberg, Scott. “Clean Energy Credits Mostly Benefit the Wealthy, New Study Shows.” [13] Medler, Robert. “The Dark Side of Residential Solar Tax Credits.” Arizona Daily Star, 21 Oct. 2014, tucson.com/news/opinion/column/guest/the-dark-side-of-residential-solar-tax-credits/article_858e7bb6-202a-5a0c-afb4-053d06711088.html. [14] Ibid. [15] Ibid. [16] Ibid. [17] Loris, Nicolas. “How 'Green' Energy Subsidies Transfer Wealth to the Rich.”

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