Solwd

By Mish Shedlock of MishTalk

What percentage of all income tax collection should the top 1 percent pay? Top 10 percent?

Summary of the Latest Federal Income Tax Data

Inquiring minds may wish to peruse a Summary of the Latest Federal Income Tax Data, 2024 Update by the Tax Foundation.

I downloaded their data and created all but one of the charts in this post. The Foundation calls it the 2024 update but the latest data is for 2021.

The bottom half of taxpayers, or taxpayers making under $46,637, faced an average income tax rate of 3.3 percent. As household income increases, average income tax rates rise. For example, taxpayers with AGI between the 10th and 5th percentiles ($169,800 and $252,840) paid an average income tax rate of 14.3 percent—four times the rate paid by taxpayers in the bottom half.

The top 1 percent of taxpayers (AGI of $682,577 and above) paid the highest average income tax rate of 25.93 percent—nearly eight times the rate faced by the bottom half of taxpayers.

Income tax after credits (the measure of “income taxes paid” above) does not account for the refundable portion of tax credits such as the EITC. If the refundable portion were included, the tax share of the top income groups would be higher and the average tax rate of bottom income groups would be lower. The refundable portion is classified as a spending program by the Office of Management and Budget (OMB) and therefore is not included by the IRS in these figures.

The only tax analyzed here is the federal individual income tax, which is responsible for more than 25 percent of the nation’s taxes paid (at all levels of government). Federal income taxes are much more progressive than federal payroll taxes, which are responsible for about 20 percent of all taxes paid (at all levels of government), and are more progressive than most state and local taxes.

AGI is a fairly narrow income concept and does not include income items like government transfers (except for the portion of Social Security benefits that is taxed), the value of employer-provided health insurance, underreported or unreported income (most notably that of sole proprietors), income derived from municipal bond interest, net imputed rental income, and others.

Average Income Taxes Paid 2024

The top 1 percent pay an average of $653,730 in Federal income taxes. The top 10 percent pay an average of $108,251 in Federal income taxes.

The Tax Foundation reports the bottom 50 percent pay an average of $667 but that is overstated.

Counting child tax credits, earned income, food stamps, and rent support, the bottom 50 percent pay negative taxes. They get much more back than they put in.

Income Taxes Paid Millions 2024

The top 1 percent contribute over $1 trillion annually. That is nearly half of what the top 50 percent contribute.

The bottom 50 percent allegedly contribute $51 billion except in practice as noted above they actually pay negative income tax.

Average Tax Rate

For all the whining about how little the top pay, on average that just isn’t true.

Warren Buffet is fond of saying his secretary pays a higher tax rate than he does, but that is the exception (depending on how much he pays her).

Bear in mind these are Federal Income taxes. There are also state income taxes, payroll taxes, capital gains, etc.

Rising Fair Share

That’s a bonus chart courtesy of the Tax Foundation. It shows that the share of income taxes paid by the top 1 percent increased from 33.2 percent in 2001 to 45.8 percent in 2021.

2021 was heavily influenced by the pandemic which affected lower paid employees more.

Given the bottom half gets money back, and collections and there are also state income taxes, payroll taxes, capital gains, etc. what percentage is fair share?

Do we have a collection problem or a spending problem?

The California Highway Patrol found 15 lbs of cocaine with a street value of $700,000 during a traffic stop in Merced Country on April 27, the CHP reported.

A CHP officer found suspected cocaine in bags containing almonds during a traffic stop April 27, 2024. (California Highway Patrol)

Around 3:15 p.m., a 2010 Subaru driving on I-5 around 30 miles west of Merced was pulled over for a traffic violation. During the stop, the officer became suspicious and conducted a search using a K-9 officer, a CHP spokesman told the Epoch Times.

“It was just a normal traffic stop,” said CHP Officer Gregorio Rodriguez. “That’s kind of what usually happens. Something was out of the ordinary. The officer did see some criminal indicators and the dog hit on the bags of almonds.”

During the search, the police dog sniffed out the cocaine, divided into 1-kilogram amounts and factory sealed within bags containing almonds. The driver, 20-year-old Angel Lopez Velasco of Mt. Vernon, Washington, and his passenger, 20-year-old Jennifer Cisneros of Burlington Washington, were arrested and booked into the Merced County Jail on suspicion of possessing a controlled substance for sale, as well as transporting a controlled substance across noncontinguous counties.

The case is currently in the hands of the Merced Area Gang Narcotics Enforcement team, according to the report.

By Jack Phillips of The Epoch Times

Former President Donald Trump argued that special counsel Jack Smith’s classified documents case against him should be tossed after prosecutors wrote that they misled a judge about the order of items in an evidence box.

In a post on Truth Social over the weekend, President Trump called for the arrest of Jack Smith and argued that the case should be thrown out based on the new court filing.

It came after Mr. Smith’s team wrote that that the order of items within a box was “not the same” as they appear in digital photographs of materials after the FBI obtained those boxes from President Trump’s Mar-a-Lago home in August 2022.

“Since the boxes were seized and stored, appropriate personnel have had access to the boxes for several reasons, including to comply with orders issued by this Court in the civil proceedings noted above, for investigative purposes, and to facilitate the defendants’ review of the boxes,” Mr. Smith’s team told U.S. District Judge Aileen Cannon last week.

They added that there are “some boxes where the order of items within that box is not the same as in the associated scans.”

His team also acknowledged in a footnote that federal prosecutors effectively misled the court after telling the judge that the evidence was exactly the same when it was seized. “The Government acknowledges that this is inconsistent with what Government counsel previously understood and represented to the Court,” the footnote said.

Mr. Smith’s team provided multiple “possible explanations” as to why the documents were rearranged after seizing the boxes from Mar-a-Lago, according to the filing.

“There are several possible explanations, including the above-described instances in which the boxes were accessed, as well as the size and shape of certain items in the boxes possibly leading to movement of items,” they wrote. “For example, the boxes contain items smaller than standard paper such as index cards, books, and stationary, which shift easily when the boxes are carried, especially because many of the boxes are not full.”

But President Trump wrote that Mr. Smith’s filing is effectively an admission of what he has “been saying happened since the Illegal RAID on my home, Mar-a-Lago, in Palm Beach … that he and his team committed blatant Evidence Tampering by mishandling the very Boxes they used as a pretext to bring this Fake Case.”

He then called for the case to be immediately dropped.

President Trump has pleaded not guilty to 40 charges connected to allegations that he illegally retained classified documents at his home after leaving in January 2021 and obstructed officials’ attempts to retrieve them. Two of his aides, Walt Nauta and Carlos de Oliveira, have also been charged in the case.

Legal group Judicial Watch also suggested that Mr. Smith’s classified documents case against President Trump should be tossed after the admission.

Judicial Watch head Tom Fitton wrote on X that prosecutors’ latest filing suggesting that there was “evidence tampering” involved is “yet more reason to throw out this sham prosecution.”

He said that the filing also included an FBI “admission” that the agency was “completely screwing with the classified documents.”

Continue reading at The Epoch Times

Authored by Jana J. Pruet via The Epoch Times (emphasis ours),

The Biden administration announced on Friday that it had finalized a directive to expand the Affordable Care Act (ACA), also known as “Obamacare,” to thousands of immigrants who were brought to the United States as children.

U.S. President Joe Biden talks about protecting the Affordable Care Act (ACA) as he speaks to reporters with Vice President Kamala Harris at this side about their “plan to expand affordable health care” during an appearance in Wilmington, Del., Nov. 10, 2020. (Jonathan Ernst/Reuters/File Photo)

The Centers for Medicare and Medicaid (CMS) estimates that “this rule could lead to 100,000 previously uninsured DACA [Deferred Action of Childhood Arrivals] recipients enrolling in health care through Marketplaces or a BHP [Basic Health Program],” the Department of Health & Human Services (HHS) said in a press release.

The move took longer than promised and fell short of President Joe Biden’s initial proposal to allow those migrants access to Medicaid, which provides free or low-cost health care coverage to the nation’s lowest-income people.

But it will allow thousands of immigrants, known as “Dreamers,” to access tax breaks when they sign up for coverage after the Affordable Care Act’s marketplace enrollment opens Nov. 1, just days before the presidential election.

“Today, my Administration is expanding affordable, quality health care coverage to Deferred Action for Childhood Arrivals (DACA) recipients,” President Biden said in a statement on Friday. “Dreamers are our loved ones, our nurses, teachers, and small business owners. And they deserve the promise of health care just like all of us.”

The measure could boost Biden’s appeal among Hispanic voters, a crucial voting bloc that he needs to turn out at the polls.

“I’m proud of the contributions of Dreamers to our country and committed to providing Dreamers the support they need to succeed,” President Biden said. “That’s why I’ve previously directed the Department of Homeland Security to take all appropriate actions to ‘preserve and fortify’ DACA. And that’s why today we are taking this historic step to ensure that DACA recipients have the same access to health care through the Affordable Care Act as their neighbors.”

The move drew criticism from presidential candidate Donald Trump’s campaign spokeswoman, Karoline Leavitt, on Friday.

“Joe Biden continues to force hardworking, taxpaying, struggling Americans to pay for the housing, welfare, and now the healthcare of illegal immigrants,” Ms. Leavitt said in a statement on X. “This is unfair and unsustainable, and Joe Biden’s handouts for illegal immigrants are especially devastating to Black Americans, Hispanic Americans, and union workers who are forced to watch their jobs and public resources stolen by people who illegally entered our country.

“President Trump will put America and the American worker first, she continued. ”He will seal the border, stop the invasion, and expand economic opportunity for American citizens, not illegal aliens.”

Any participant in the Obama-era DACA program will be eligible to access health care through the government marketplace.

HHS Secretary Xavier Becerra said that many of those migrants have delayed getting care because they lack coverage.

“They incur higher costs and debts when they do finally receive care,” Mr. Becerra told reporters on a call. “Making Dreamers eligible to enroll in coverage will improve their health and well-being and strengthen the health and well-being of our nation and our economy.”

New Definition for ‘Lawfully Present’

The administration modified the definition of “lawfully present,” which is used to determine eligibility for coverage so that DACA participants can legally enroll on the marketplace exchange.

“These changes aim to ensure complete, accurate, and consistent eligibility determinations and verification processes for health coverage for these populations,” HHS wrote.

The DACA initiative was launched by then-President Barack Obama to protect immigrants from deportation who were brought to the United States illegally by their parents as children. The program allowed them to work legally in the country.

However, the “Dreamers” were still ineligible for government-subsidized health insurance programs because they did not meet the definition of having a “lawful presence” in the United States.

Senior officials told reporters that the administration chose not to expand Medicaid eligibility for Dreamers after receiving 20,000 comments on the proposal during the public comment period. They declined to explain why it took so long to finalize the rule, which was proposed in April 2023.  The delay kept the immigrants from enrolling for coverage this year.

At one point, as many as 800,000 immigrants were enrolled in DACA, though now that figure is roughly 580,000. Officials predict only about 100,000 will actually sign up because some may get coverage through their workplaces or other ways, and others may not be able to afford coverage through the marketplace.

Other classes of immigrants, including asylum seekers and people with temporary protected status, are already eligible to purchase insurance through the ACA marketplaces.

Last year, President Biden also unveiled a regulation aimed at fending off legal challenges to DACA; former President Donald Trump moved to end the policy, and it has bounced back and forth in federal court. Last fall, a federal judge said the current version can continue at least temporarily.

“President Biden and I will continue to do everything in our power to protect DACA, but it is only a temporary solution,” Vice President Kamala Harris said in a statement. “Congress must act to ensure Dreamers have the permanent protections they deserve.”

By John Kemp, senior energy analyst at Reuters

Saudi Arabia and its allies in OPEC⁺ are likely to keep oil production unchanged for a further three months when ministers review output allocations on June 1.

The tightening of petroleum supplies and depletion of inventories widely anticipated at the start of the year has failed to materialise so far. If OPEC+  officials had hoped to increase production into a tightening market characterised by rising oil prices they are likely to be frustrated.

Crude stocks, futures prices and calendar spreads are all at similar levels to a year ago, making a significant increase in output unlikely.

The group may nonetheless decide it needs to rescind some of last year’s output cuts to pre-empt a further rise in production from the United States, Canada, Brazil and Guyana and avoid conceding more market share.

But current market conditions mean any increase is likely to be symbolic, in the absence of a wholesale shift in strategy to increase volumes and accept lower prices.

PRICES AND SPREADS

Front-month Brent futures have averaged $84 per barrel so far in May putting them exactly in line with the average since the start of the century after adjusting for inflation.

Prices have risen by just $6 per barrel (7%) compared with a year ago when the group was planning production cuts to boost them.

Brent’s six-month calendar spread has traded in an average backwardation of $3.54 (86th percentile for all months since 2000) so far in May compared with $1.81 (60th percentile) this month in 2023.

The increased backwardation implies traders see the market somewhat tighter than in 2023 with a greater likelihood inventories will deplete over the rest of 2024. But the backwardation has been breaking down in recent weeks and has already narrowed from an average of $4.86 (95th percentile) in April.

Despite an increase in tensions across the Middle East, causing a temporary rise in the war risk price premium, there has been no actual impact on oil supplies, and the premium has largely faded.

Diplomatic efforts have contained conflict between Iran and Israel, with no impact on either oil production or tanker exports from the Persian Gulf.

Tanker traffic has been re-routed from the Red Sea and the Gulf of Aden around the Cape of Good Hope to avoid drone and missile attacks from Houthi fighters based in Yemen.

U.S. OIL INVENTORIES

In the United States, commercial crude inventories are at almost the same level as this time last year and close to the prior ten-year seasonal average. Commercial crude stocks amounted to 461 million barrels on April 26 compared with 460 million barrels a year earlier.

Crude inventories were just 5 million barrels (-1% or -0.11 standard deviations) below the prior ten-year seasonal average.

There have been no signs of a significant and sustained draw down of inventories that would indicate the market has been under-supplied.

Most U.S. crude inventories are held at coastal refineries and tank farms along the Gulf of Mexico, which is also the region most closely integrated with the global sea-borne market.

Gulf of Mexico stocks amounted to 262 million barrels on April 26, which was 6 million barrels above the same time last year…

…and 15 million barrels (+6% or +0.57 standard deviations) above the ten-year seasonal average.

The United States is not the whole global market but given the efficiency with which traders move barrels to exploit local discrepancies between production and consumption, it is a good marker for the global balance.

U.S. crude inventories, global futures prices and to some extent softening calendar spreads all point to a market fairly close to balance. Portfolio investors certainly seem to think so, with roughly equal upside and downside risks to prices.

On April 23, hedge funds and other money managers held a net long position in futures and options linked to crude prices equivalent to 453 million barrels (46th percentile for all weeks since 2013).

The position was an increase from 388 million barrels (29th percentile) at the same point in 2023 but was basically neutral.

Neither fund managers nor physical traders are signalling the need for an increase in production from Saudi Arabia and its OPEC⁺ allies in the third quarter.

PRODUCTION POLICY

Senior OPEC ministers and officials stress the group’s policy is to be proactive and forward-looking. That may be true when it comes to reducing production to avert an increase in excess inventories and stabilise prices.

When it comes to increasing production, however, the group has normally waited until stocks have fallen and prices have already risen significantly.

In this instance, inventories and prices close to the long-term average imply ministers are likely to decide to keep output unchanged, based on their behaviour in the past. In the last decade, OPEC⁺ production cuts have propped up prices and supported continued growth in output from outside the group especially in the western hemisphere.

Some members of the organisation have expressed concerns about the loss of market share and pushed to increase production.

So far, Saudi Arabia has led OPEC⁺ in cutting production to reduce stocks and boost prices at the expense of volumes.

There are questions about the long-term sustainability of this strategy, but so far there’s no sign of a fundamental rethink.

If ministers eventually decide the loss of market share has gone too far, they could cite stronger forecast demand and a predicted future decline in inventories to justify boosting production.

That would reveal a major change in strategy to prioritise volume over prices and there is no sign of it yet. If OPEC⁺ nonetheless decides to announce an output increase, it is likely to be small and symbolic.

In the wake of a catastrophe that claimed the lives of six roadwork crew members and disrupted one of the nation’s busiest ports, Maryland has committed to a monumental task of rebuilding the Francis Scott Key Bridge. The project, set to be completed by the fall of 2028, is projected to cost between $1.7 billion and $1.9 billion, according to David Broughton, spokesperson for the Maryland Department of Transportation.

Workers remove wreckage of the collapsed Francis Scott Key Bridge (AP/Matt Rourke)

The announcement comes as state and federal agencies press forward with recovery efforts following the bridge’s tragic collapse on March 26, which not only resulted in significant loss of life but also temporarily shut down the Port of Baltimore. The collapse occurred when a container ship, having lost power, struck one of the bridge’s main supports.

Fifth body recovered

Salvage operations achieved a somber milestone late Wednesday with the recovery of Miguel Angel Luna Gonzalez, 49, from Glen Burnie, Maryland, marking the last of five missing people identified after the accident. Gonzalez, along with the other victims, was working on the bridge when the disaster struck, AP reports.

Salvage teams found one of the missing construction vehicles Wednesday and notified the Maryland State Police, officials said. State police investigators and Maryland Transportation Authority Police officers and the FBI responded to the scene and recovered the body inside a red truck. The state police underwater recovery team and crime scene unit also assisted.

Governor Wes Moore expressed his condolences, reflecting the collective heartache: “We continue to pray for Miguel Angel Luna Gonzalez, his family, and all those who love him, acknowledging the anguish they have experienced since the Key Bridge collapsed. We pray for comfort, we pray for healing, and we pray for peace in knowing that their loved one has finally come home.”

(Photo: AP/Matt Rourke)

The detailed engineering plans for the new bridge are still under development, with state officials emphasizing both the urgency and the complexity of the design process. The new span not only promises to restore a critical infrastructural node but also aims to be a beacon of safety and innovation to prevent future tragedies.

Meanwhile, the broker for the bridge’s insurance policy confirmed Thursday that a $350 million payout will be made to the state of Maryland in what is expected to be the first of many payouts related to the collapse.

Chubb, the company that insured the bridge, is preparing to make the $350 million payment, according to WTW, the broker. Douglas Menelly, a spokesperson for WTW, on Thursday confirmed plans for the payout, which was first reported by The Wall Street Journal. Chubb did not immediately respond to a request for comment Thursday.

The Maryland Transportation Authority said Thursday that the state’s treasurer filed a claim on the day of the bridge’s collapse “against our $350 million property policy and put on notice our $150 million liability policy first tier carrier on behalf of MDTA.” -AP

The FBI, alongside Maryland State Police and the Maryland Transportation Authority Police, continues to investigate the circumstances surrounding the collapse, ensuring that the lessons learned from this tragic event will forge a safer path forward for all.

Authored by Tom Ozimek via The Epoch Times (emphasis ours),

Tesla CEO Elon Musk has sounded the alarm on the Biden administration’s massive deficit spending, warning that unless steps are taken to slow down the growth of America’s national debt, the U.S. dollar will become worthless.

President Joe Biden (L) at the White House in Washington, on July 8, 2022; Tesla head Elon Musk (R) talks to the press near Berlin on Sept. 3, 2020. (Alex Wong/Getty Images; Maja Hitij/Getty Images)

“We need to do something about our national debt or the dollar will be worth nothing,” Mr. Musk said in a post on X.

The billionaire tech mogul was reacting to a post about Gen. H.R. McMaster warning that the world is on the cusp of World War III and calling for a doubling of defense spending to prepare for potential threats.

We need to do something about our national debt or the dollar will be worth nothing

— Elon Musk (@elonmusk) May 3, 2024

Mr. Musk has repeatedly advocated for a negotiated end to the conflict in Ukraine to put a halt to the loss of life.

For instance, during a February conversation on X with Sen. Ron Johnson (R-Wis.), Mr. Musk said the Wisconsin Republican was “exactly right” when the lawmaker said that additional U.S. aid to Ukraine had only prolonged a bloody stalemate and that the only way the war ends is through a negotiated settlement.

Besides being an advocate for ending the war in Ukraine, Mr. Musk has been a repeated critic of the U.S. government’s massive deficit spending.

‘Overspending Must Stop’

Mr. Musk has repeatedly criticized the Biden administration’s huge spending bills.

For instance in December 2021, he expressed concern for the “insane” federal deficit and said he would “can” President Joe Biden’s “Build Back Better” bill that cost over $2 trillion and was estimated by the non-profit watchdog Committee for a Responsible Federal Budget to add $160 billion to deficits over ten years.

More recently, Mr. Musk warned that a reckoning would eventually come for America’s ballooning national debt.

“US national debt growth is unsustainable,” Mr. Musk said in a Feb. 12, 2024 post. He was reacting to a post indicating that the interest payments on America’s $34 trillion national debt were already around $1 trillion a year and projected to rise to $3 trillion annually in less than ten years.

In March, Mr. Musk reacted to a post indicating that it took roughly 63 percent of all personal income taxes in February 2024 just to pay the interest on America’s $34 trillion national debt.

“Overspending must stop or America will go bankrupt,” Mr. Musk posted at the time.

Entrepreneur Ed Krassenstein reacted to Mr. Musk’s latest May 4 warning about the need to rein in out-of-control deficit spending by saying in a post that no administration is willing to tackle the national debt problem because the long-term “fix is likely a short term detriment to the economy.”

Mr. Musk replied: “Well, something’s gotta give. We should at least slow down the debt growth.”

‘Higher Taxes Are Likely’

Like Mr. Musk, billionaire investor Warren Buffett has also warned about the “important consequences” of deficit spending. However, the Berkshire Hathaway founder predicted that, when push comes to shove, the government would opt to raise taxes rather than reduce spending.

“I think higher taxes are likely,” Mr. Buffett said on May 4 at Berkshire Hathaway’s annual shareholder meeting in Omaha.

“They may decide that some day they don’t want the fiscal deficit to be this large because that has some important consequences. So they may not want to decrease spending and they may decide they’ll take a larger percentage of what we own, and we’ll pay it,” he said.

Warren Buffett (C), CEO of Berkshire Hathaway, speaks to the press as he arrives at the 2019 annual shareholders meeting in Omaha, Nebraska, May 4, 2019. (Johannes Eisele/AFP via Getty Images)

Deficit spending in the United States hit $1.7 trillion in 2023, or 6.3 percent of gross domestic product (GDP), according to a recent report from the Congressional Budget Office (CBO). The agency estimated that deficit spending would grow to 8.5 percent of GDP by 2054.

At the same time, CBO projected that America’s debt-to-GDP ratio, which in the 1980s was around 35 percent of GDP, will grow to 166 percent by 2054, while warning that this would pose “significant risks” to America’s fiscal and economic outlook.

Analysts at the University of Pennsylvania estimate that when the debt-to-GDP ratio hits around 200 percent, it will hit the point of no return—when no amount of future tax increases or spending cuts could prevent the government from defaulting on its debt.

“Unlike technical defaults where payments are merely delayed, this default would be much larger and would reverberate across the U.S. and world economies,” they explained.

Under a “best case” scenario, the University of Pennsylvania analysts estimate that the United States has around 20 years to take corrective action before the growing debt spiral spins out of control.

JPMorgan CEO Jamie Dimon has predicted that America’s debt-to-GDP ratio would “hockey stick” upward at some point, meaning rise sharply and become unsustainable after a period of relatively gradual increase.

“It is a cliff. We see the cliff. It’s about 10 years out. We’re going 60 miles an hour,” Mr. Dimon said, speaking on a panel at the Bipartisan Policy Center in Washington at the end of January 2024.

The International Monetary Fund (IMF) has also sounded the alarm on the Biden administration’s fiscal stance, warning that its massive deficit spending and ballooning public debt threaten to stoke inflation and—potentially—even spark financial chaos.

The same day that a second Boeing-linked whistleblower death on Tuesday, supplier Spirit Aerosystems filed a lawsuit against Texas Attorney General Ken Paxton after he opened a safety probe into the company in late March.

Filed in Austin, Spirit is alleging that Paxton’s demand for internal documents and other information is unlawful, and violates their right against unreasonable search and seizure.

Paxton opened the investigation into Spirit following “reoccurring issues with certain airplane parts provided to Boeing,” including a midair blowout of an Alaskan Airlines 737 MAX door panel two months prior.

He is the second Boeing-related whistleblower to die after John “Mitch” Barnett was found dead from an alleged self-inflicted gunshot wound the morning of a court appearance. The same attorney was representing both men in their efforts to testify about quality-control problems persistent within Boeing and its supplier, Spirit AeroSystems. –Epoch Times

Spirit is a key supplier of fuselages and other components for Boeing. Meanwhile, the Biden DOJ is mulling whether the Alaskan Airlines incident breached a deferred prosecution agreement with Boeing, which was set to expire two days later (so, absolutely yes?).

According to Spirit spokesman Joe Buccino, the supplier “brought this litigation seeking a determination whether the Texas statute at issue is constitutional under existing case law within the Fifth Circuit and the U.S. Supreme Court,” adding that they don’t plan to comment further.

Spirit alleges that Paxton’s probe “bears no connection to events occurring in the State of Texas and as such has, at best, a questionable law enforcement purpose,” since they only operate a single facility in Texas which houses 98 of the company’s 20,655 employees.

On March 28, Paxton released a statement justifying his safety probe into Spirit.

“The potential risks associated with certain airplane models are deeply concerning and potentially life-threatening to Texans,” he wrote, adding “I will hold any company responsible if they fail to maintain the standards required by the law and will do everything in my power to ensure manufacturers take passenger safety seriously.“

By Mish Shedlock of MishTalk

The lie of the day is from the EPA: Carbon capture will pay for itself (thanks to IRA subsidies). No, it won’t even with subsidies. Expect blackouts and a higher price for electricity.

Suite of Standards to Raise Costs, Reduce Output

Let’s take a dive into the EPA news release Biden-Harris Administration Finalizes Suite of Standards to Reduce Pollution from Fossil Fuel-Fired Power Plants

“Today, EPA is proud to make good on the Biden-Harris Administration’s vision to tackle climate change and to protect all communities from pollution in our air, water, and in our neighborhoods,” said EPA Administrator Michael S. Regan. “By developing these standards in a clear, transparent, inclusive manner, EPA is cutting pollution while ensuring that power companies can make smart investments and continue to deliver reliable electricity for all Americans.”

A final rule for existing coal-fired and new natural gas-fired power plants that would ensure that all coal-fired plants that plan to run in the long-term and all new baseload gas-fired plants control 90 percent of their carbon pollution.

The final emission standards and guidelines will achieve substantial reductions in carbon pollution at reasonable cost. The best system of emission reduction for the longest-running existing coal units and most heavily utilized new gas turbines is based on carbon capture and sequestration/storage (CCS) – an available and cost-reasonable emission control technology that can be applied directly to power plants and can reduce 90 percent of carbon dioxide emissions from the plants.

Lower costs and continued improvements in CCS technology, alongside tax incentives from President Biden’s Inflation Reduction Act that allow companies to largely offset the cost of CCS, represent recent developments in emissions controls that informed EPA’s determination of what is technically feasible and cost-reasonable. The Bipartisan Infrastructure Law also includes billions of dollars to advance and deploy CCS technology and infrastructure. EPA projects that the sector can comply with the standards with negligible impact on electricity prices, thanks to cost declines in CCS and other emissions-reducing technologies. EPA analysis also finds that power companies can comply with the standards while meeting grid reliability, even when considering increased load growth.

Final EPA Rule

The EPA’s Final Rule is only 1,020 pages long. There were 953 references to carbon capture and sequestration/storage (CCS).

I went through some of those 953 references and found these tidbits.

CCS is an adequately demonstrated technology that achieves significant emissions reduction and is cost-reasonable, taking into account the declining costs of the technology and a substantial tax credit available to sources.

The first component of the BSER [Best System of Emission Reduction] for base load combustion turbines is highly efficient generation (based on the emission rates that the best performing units are achieving) and the second component for base load combustion turbines is utilization of CCS with 90 percent capture.

One of the key GHG [Greenhouse Gasses] reduction technologies upon which the BSER determinations are founded in these final rules is CCS—a technology that can capture and permanently store CO2 from fossil fuel-fired EGUs.

I confess. I did not read all 1020 pages and don’t intend to. I have seen enough by reading through a dozen or so of the 953 references to CCS.

Returning to the Biden-Harris document I note references to “reasonable cost” and “largely offset the cost of CCS.” Thus CCS is admittedly not cost effective even with subsidies.

IISD Sustainable Development

For a rebuttal to the above Biden claims, please consider the International Institution for Sustainable Development article Why Carbon Capture and Storage Is Not a Net-Zero Solution for Canada’s Oil and Gas Sector

The poor track record of CCS in Canada is part of a broader trend. According to the Global CCS Institute (2022), the global growth of carbon captured by commercially operating CCS facilities has been much slower than anticipated. As of September 2022, only 30 commercial CCS projects are operating across all sectors around the world, capturing 42.5 Mtpa. This falls far short of the IEA’s (2009) previous target of 300 Mtpa by 2020. Most proposed projects have been withdrawn: of the 149 CCS projects anticipated to be storing carbon by 2020, over 100 were cancelled or placed on indefinite hold (Abdulla et al., 2020; Wang et al., 2021). In the United States, despite significant industry and government investment in the technology, more than 80% of proposed CCS projects have failed to become operational due to high costs, low technological readiness, the lack of a credible financial return, and dependence on government incentives that are withdrawn. Of those projects that are operating globally, 73% of the carbon captured is used for EOR.

Put simply, proponents of CCS have repeatedly over-promised on the technology’s ability to reduce emissions, and CCS projects have under-delivered.

CCS is both energy and capital intensive. The greatest amount of energy is required for the capture and compression of carbon, with additional amounts needed for transportation and storage. Capture and compression alone require 330–420 kWh per tonne of CO2 captured. CCS projects increase the energy demand of the facility they capture carbon from by 15%–25% on average, which stands to increase emissions given that the energy used to capture CO2 is often natural gas-powered electricity. In general, the technology is highly energy inefficient and generates its own emissions.

The above doc largely pertains to carbon capture in Canada’s Oil and Gas Sector, not electricity production, bit it is instructive on the difficulty of and inefficacy of carbon capture.

The lead CCS image is from that post.

Biden EPA’s Plan to Ration Electricity

The Wall Street Journal calls the CCS mandate Biden EPA’s Plan to Ration Electricity

Section 111 of the Clean Air Act says the EPA can regulate pollutants from stationary sources through the “best system of emission reduction” that is “adequately demonstrated.” Carbon capture is neither the best nor adequately demonstrated. As of last year, only one commercial-scale coal plant in the world used carbon capture, and no gas-fired plants did.

EPA says Inflation Reduction Act tax credits and funding in the 2021 infrastructure bill will “incentivize and facilitate the deployment” of carbon capture. But subsidies would have to be two to three times larger to make the technology cost-effective at a coal plant. Carbon capture reduces a plant’s efficiency, which also raises costs.

Because carbon capture uses 20% to 25% of the electricity generated by a power plant, less will be available to the grid. That means more generators will be needed to provide the same amount of power. But new gas-fired plants won’t be built because the technology will make them uneconomic. Talk about a catch-22.

Another problem: CO2 must be stored underground in certain geologic formations, largely in the upper Midwest and Gulf Coast. Permitting new wells for CO2 injections can take six years. Pipelines to transport CO2 can take even longer. Green groups oppose pipelines for CO2 as they do for oil and natural gas.

All of this will hit while demand for power is surging amid new manufacturing needs and an artificial intelligence boom. Texas’s grid operator this week raised its forecast for demand growth for 2030 by 40,000 megawatts compared to last year’s forecast. That’s about seven times the power that New York City uses at any given time.

Texas power demand will nearly double over the next six years owing to data centers, manufacturing plants, crypto mining and the electrification of oil and gas equipment. When temperatures in Texas recently climbed into the 80s, the grid operator told power plants not to shut down for maintenance. Americans around the country are increasingly being told to raise their thermostats during the summer and avoid running appliances to prevent blackouts.

Even some Democrats are noticing the pinch on their voters’ pocketbooks. Reps. Marcy Kaptur, Henry Cuellar, Mary Sattler Peltola, Vicente Gonzalez and Jared Golden last weekend urged President Biden to defer finalizing EPA’s power-plant rules because they could “inadvertently exacerbate existing problems related to the unaffordability of electricity” and cause “increased risks to electric reliability.”

Mr. Biden’s new rules will surely draw a legal challenge. But as litigation plays out, the tremendous uncertainty will delay investment in much-needed new gas plants. Americans didn’t face energy rationing in Mr. Biden’s first term, but they might in a second.

The Inflation Reduction Act Keeps Biting in Predictable Ways

Biden plans to reduce inflation by raising costs, producing less electricity when more is needed, force people into EVs without a capable grid, pipeline captured carbon when the pipelines don’t exist and allegedly increase reliability.

It’s so stupid even some Democrats are concerned. Well not to worry, this can all be done at a “reasonable cost” with costs “largely offset” thanks to the IRA.

Expect blackouts and a much higher price for electricity as a key component of “reasonable cost”.

By Garfield Reynolds, Bloomberg Markets Live reporter and strategist

The first of Japan’s apparent twin interventions last week may have capped USD/JPY for some time to keep the pair under 160. But that had very little to do with flushing out yen short positioning at least with the initial move. Large speculators as covered by CFTC data through last Tuesday were still very strongly positioned for yen declines, highlighting both why Japan was so willing to apparently step in again on Thursday morning Tokyo time, and why it may need to do so several more times in the coming weeks.

The latest CFTC reading shows yen bears trimmed positions for the first time in seven weeks, but they only cut back by 11,531 contracts — less than the shorts added in the prior week to April 23!

So the newest, weakest hands look to be the only ones who got forced out when Japan sold an estimated $35b to buy yen. That did at least stop the CFTC shorts exceeding the record 188,000 contracts touched in 2007, though it left them at extreme levels.

Perhaps the second time Japan stepped in — after the Federal Reserve’s Wednesday decision — caused more of a positioning shift, coming as it did in the US session rather than during Tokyo hours. But we won’t find out how much of an impact until this coming Friday’s release from the CFTC.