Taxing creativity

May 28, 2007
I concur with the position of your editorial “Fuels and political favors” (OGJ, May 7, 2007, p. 17).

I concur with the position of your editorial “Fuels and political favors” (OGJ, May 7, 2007, p. 17).

However, opposition from “protesting lawmakers” was to have been expected. It is often a normal reaction to successful programs. I recall having developed a salesman compensation program which met all of the vice-president of marketing’s desires and had his full approval. At yearend, the program had exceeded all sales goals, contributing to unprecedented profitability at the Williams Cos. fertilizer division. But the executive in charge was extremely displeased: A very few salespersons received total compensation which exceeded his own.

Successful incentive programs should drive creativity to new heights along unexpected paths. ConocoPhillips’s venture not only provides a feedstock for biodiesel, it uses waste materials extracted as part of the water purification process at animal processing facilities.

If the current uproar is not overcome, where will it stop? I can anticipate challenges to the Cargill-Ashland venture which will produce chemicals with glycerin waste from agricultural biodiesel production. Yet many biodiesel ventures have wondered how to make that waste disappear through landfill or compost. The Cargill-Ashland venture should be cheered, not attacked. Yet the same rationale used to oppose the ConocoPhillips project may encourage an effort to recapture biodiesel financial incentive from chemical users of glycerin. Where would it stop? Should the distillers’ grain (one of the effluents of ethanol manufacture) be taxed? This high-protein byproduct, now far more available due to the ethanol craze, is being substituted for soybean meal in animal rations.

At this rate, the mantra may soon be: “If a profit is being made from unexpected creativity, tax it to oblivion.” It sounds ominously like the refrain emanating from Venezuela. Creativity is one of the primary means for this nation to meet its many energy and environmental challenges. Let us not stifle that guiding light every time it brings success.

Gerard d’Aquin
Con-Sul Inc.
Bigfork, Mont