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The Club PUBlication 04/25/2022

4/25/2022

FILING IS A NIGHTMARE

By MICHELLE SINGLETARY
Special to the Washington Post

With hours to go before Monday's midnight tax-filing deadline, the IRS online account system was down, so a message was posted for users that said: "We're sorry, due to incresed traffic, this service may be temporarily unavailable."And , that wasn't my typo for the word increased. The note to taxpayers misspelled increased.

I'm assuming someone was so rushed to type the notification that they introduced an error, providing a metaphor for the way we taxpayers feel — overwhelmed, frustrated and mad as hell.

That typo symbolized a U.S. tax filing system that is faulty, with a weary staff shouldering an enormous workload.

People pay to get their tax returns prepared because the 1040 form — and most IRS schedules and forms — are incomprehensible to a normal person. You can't easily reach a live person at the IRS to ask even the most basic question. Millions of returns are stuck in a backlog, fueling the wrath of folks akin to those in torment in the fifth circle of hell in Dante's "Inferno."

Why wouldn't the IRS have enough capacity to handle last-minute inquiries from taxpayers trying to find the information they need to file their returns? People were redirected to another system to make tax payments, with a warning that if they couldn't use the IRS online payment system, they were still responsible for getting their payments in on time.

What, by carrier pigeon? In the past, many U.S. Postal Service offices around the country were open until midnight on the April deadline, with staff sometimes lined up outside to take and postmark tax returns from people who didn't need to leave their vehicles.

How many folks greeted with that online message about timely payments just gave up and didn't file or pay? Google Trends reported that the top search on tax day each year is: "How do I file for a tax extension?"

Of course there was going to be increased traffic on the big day, which is something the agency should be able to plan for to avoid disruptions in access. And it's not just procrastinators trying to look at their accounts. I've heard from dozens of readers who were having trouble e-filing leading up to the April 18 deadline.

IRS Commissioner Chuck Rettig posted a message to taxpayers on April 18.

"Millions of returns are awaiting processing, and billions in refunds are still to be distributed," he wrote. "This has been a season of frustration for many people, including those still waiting for us to process their tax returns from last year, those who filed amended returns, those who face delays and those who tried calling our phone lines and faced long wait times — if they could get through at all. This is frustrating for all of us at the IRS as well."

In large part, Rettig blamed the agency's insufficient budget, which has dropped 15% in real terms over the last decade. It's not just about the budget deficiency. The problem starts with the entire IRS filing system, which is so impenetrable that millions of Americans feel like they have no choice but to use paid tax software to file their returns.

But what if the IRS started the filing process for you?

"Every year when your W-2s and 1099s come in the mail, your employer has already sent a copy to the government," Sen. Elizabeth Warren, D-Mass., said in a video tweet about the tax prep industry posted days before the tax deadline. "So it's no secret. The government already knows how much you made before you file your taxes. So instead of you doing all the scrambling and calculating and late nights in April, the IRS could just send you a pre-filled out tax form based on information they already have." Warren said people could just confirm the information and then send the tax form back.

Easy, right?

But not as lucrative for the companies that profit handsomely from the complexity of the forms.

If there was ever a time to push free filing for all, it's now. Yes, the pandemic pushed an already broken system to the brink, but the commercialization of tax preparation is a circle of hell from which we need salvation.

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The Club PUBlication 04/18/2022

4/18/2022

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SOLAR POWER SURGES DURING ENERGY CRISIS

Renewables are accelerating, but the wind industry lags due to regulatory roadblocks in the European Union.
By DAVID FICKLING • Bloomberg NewsSOLAR

An Ipsun Solar worker installed solar panels in Alexandria VA., last year. The world will build about 245 gigawatts of photovoltaic capacity is 2022.

From the way the public conversation was going, you might think renewable energy was firmly on the back burner as a result of the energy crisis that has roiled the world since late last year.

Transport fuel taxes have been cut to ease the pain of high crude prices in the European Union, India, the U.K. and U.S., among other countries. Europe's power plants burned 51% more coal in early March than they did a year earlier.

China's rush to use more coal after power cuts last year was even more dramatic: The country mined 687 million metric tons of solid fuel in January and February, equivalent to nearly two years of European coal consumption and a third more than in the same period of 2019.

That's troubling, considering the Intergovernmental Panel on Climate Change's warning last week that carbon pollution must peak by 2025 if the world is to avoid catastrophic global warming. And yet, the true picture is rather different.

Far from reversing, the renewables transition shows many signs of accelerating.
The world will build about 245 gigawatts (GW) of photovoltaic capacity in 2022, BloombergNEF estimated last month — a third more than was installed in 2021 and a 7.5% increase over a previous estimate for this year, made as the energy crisis was kicking off last fall.

Figures on that scale are staggering: 245 GW, for instance, is equivalent to about twothirds of the world's total installed nuclear capacity. At the start of 2020, a cumulative 651 GW of solar panels had been installed in all of human history. About 12 months from now, we're likely to have doubled that figure in just over three years.

Players in the solar industry are betting on growth. After shortages of polysilicon raw material drove prices higher last year, a flood of new manufacturing capacity has entered the market. The choke point in the supply chain is now silicon-wafer production, but even that is sufficient to turn out about 431 GW of cells each year, according to BloombergNEF.

With relatively minor increases in ingot and wafer capacity, the world's solar supply chain is now large enough to connect about 5,300 GW of panels by 2030 — sufficient to put us on track to net zero emissions by 2050. Should the industry's growth rate fall by about 10 percentage points from the average 25% seen over the last five years, we would still hit that target.

This all sounds rather optimistic.

The problem comes on the other side of the renewables coin — wind power.
In contrast to the unflagging boom in solar energy, wind generation appears to be hitting the buffers.

Turbine capacity installed actually fell marginally last year from 2020's record total to 94 GW, the Global Wind Energy Council said in a report this month. It will then stagnate at levels not much higher than that until the middle of the decade, leaving the world in 2030 with only about 64% of the wind power necessary to hit net zero.

That's mostly not because of any failures in the technology. Instead, it's a result of the regulatory challenges needed to get a wind farm up and running, especially onshore. "Permitting is the main roadblock hindering our progress," wrote Xabier Viteri Solaun, the head of Iberdrola SA's renewables business. In Italy, it takes an average of five years to get the licenses needed for a new wind farm.

Across Europe, just half of the 20 GW of onshore wind capacity put up to auction in 2021 was awarded a contract. Those factors are compounded when you consider that the transmission lines needed to integrate all these new power plants, and to balance generation across long distances to make up for regional shortfalls, also require lengthy permitting processes.

The European Union will announce plans next month intended to clear these roadblocks, but much of the relevant regulation happens at the country and municipal level, so will be hard to dislodge.

One of the heartening aspects about the way wind and solar have grown in tandem over the past decade is that they complement each other well. Photovoltaic generation tends to be weaker in winter and nonexistent at night.
Wind, on the other hand, performs better at those times.

Pushing the world's grid emissions to zero will require far more than just these two technologies, with hydroelectric, nuclear, geothermal, biomass and even abated fossil power likely to play a role.

With wind misfiring, however, all hope of turning the corner in time looks out of reach. Don't get misled by the surging prices of coal, oil and gas right now. They are a shortterm phenomenon, and in the long term high costs will make fossil fuels even less attractive to utilities, households and manufacturers wherever cheaper, less polluting alternatives are available.

The regulatory roadblocks to wind power and transmission, on the other hand, are a cost which isn't getting any smaller.

That's a far greater threat to the energy transition.

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The Club PUBlication 04/11/2022

4/11/2022

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One of the world’s hottest places lags on climate action

Record heat waves are roasting Kuwait, threatening not just birds but people, too.

By ISABEL DEBRE Associated Press

A Kuwaiti woman fed sgray cats in February Kuwait's heat waves are so severe people are finding them unbearable.

It was so hot in Kuwait last summer that birds dropped dead from the sky. Sea horses boiled to death in the bay. Dead clams coated the rocks, their shells popped open like they'd been steamed.

Kuwait reached a scorching temperature of 127.7 degrees Fahrenheit, making it among the hottest places on Earth.

The extremes of climate change present existential perils all over the world. But the record heat waves that roast Kuwait each season have grown so severe that people increasingly find it unbearable.

By the end of the century, scientists say being outside in Kuwait City could be life-threatening — not only to birds. A recent study also linked 67% of heat-related deaths in the capital to climate change.

And yet, Kuwait remains among the world's top oil producers and exporters, and per capita is a significant polluter. Mired in political paralysis, it stayed silent as the region's petrostates joined a chorus of nations setting goals to eliminate emissions at home — though not curb oil exports — ahead of last fall's U.N. climate summit in Glasgow. Instead, Kuwait's prime minister offered a years-old promise to cut emissions by 7.4% by 2035.

"We are severely under threat," said environmental consultant Samia Alduaij. "The response is so timid it doesn't make sense."

Racing to burnish their climate credentials and diversify their economies, Saudi Arabia pitches futuristic car-free cities and Dubai plans to ban plastic and multiply the emirate's green parks.

While the oil-rich Gulf Arab states' pledges to cut emissions are minor in the grand scheme to limit global warming, they have symbolic significance.

Yet the gears of government in Kuwait, population 4.3 million, seem as stuck as ever — partly because of populist pressure in parliament and b ecause the same authorities that regulate Kuwait's emissions get nearly all of their revenue from pumping oil.

"The government has the money, the information and the manpower to make a difference," said lawmaker Hamad al-Matar, director of the parliamentary environmental committee."It doesn't care about environmental issues."

While Saudi Arabia and the UAE compete for shares of a fast-growing renewable energy market, Kuwaiti environmentalists are taking on the role of town crier.

"Renewables make so much more financial sense," said Ahmed Taher, an energy consultant . "[The government] needs to know how much more money Kuwait could save and how many more jobs it could have."

But for now, Kuwait keeps burning oil

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The Club PUBlication 04/04/2020

4/4/2022

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Now is a great time to invest in
i-Bonds

CHRIS FARRELL

Mininum investment . . . $25.

When it comes to saving money that you don’t need for at least one year there is a terrific high-rate, low-risk savings option available to the typical household: U.S. I-Bonds.

To be sure, the correct response to the promised combination of high-rate and lowrisk is usually to run — fast.

Not in this case.
For one thing, the current rate on I-Bonds is a steep 7.12%. For another, I-Bonds are creditworthy since they are obligations of the U.S.Treasury. Finally, I-Bonds hedge against inflation measured by the Consumer Price Index (CPI).  Your savings in I-Bonds will maintain its purchasing power over time. Everyone these days is getting a lesson in the value of inflation-protected investment.

I’ve written about I-Bonds recently. I’m revisiting the topic for two reasons.

First, to remind readers that if you receive a refund on your taxes, you have the option to buy up to $5,000 worth of paper I-Bonds with the refund.

The other factor is that the rate on I-Bonds will adjust in May. The CPI for March will be released on April 12, and that is the only data left to determine the inflation adjustment for the next sixmonth cycle.

Even if the March CPI comes in flat from February — highly unlikely — the next adjustment will be 6.86% already, notes Harry Sit of the Finance Buff blog.  “So I think it’s almost certain the next adjustment will be at least 7%,” Sit wrote in an e-mail. “There’s a good chance it’ll be 8%-plus, and even 9%-plus is within the realm of possibilities.”

A quick primer: I-Bonds are purchased online from the U.S. Treasury at

        treasurydirect.gov.

The calendar year limit is $10,000 (plus up to $5,000 in paper I-Bonds with your tax refund). No commission is charged.

Your money is tax-sheltered until the bonds are redeemed.

You will pay federal income taxes on the gain, but I-Bonds are free of state and local taxes.

You can cash in your I-Bond investments after holding them for 12 months.

If you sell them before the investment is five years old, you will lose the last three months of interest.

(Sit offers a detailed tutorial on his website that I recommend: “How to Buy I Bonds (Series I Savings Bonds): Soup to Nuts.”) I-Bonds are great for longterm savers. They also work well as part of your emergency-savings fund once you get past the 12-month holding period.

Chris Farrell is senior economics contributor to American Public Media’s “Marketplace” and a commentator for Minnesota Public Radio.

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The Club PUBlication 04/25/2022

​FILING IS A NIGHTMAREBy MICHELLE SINGLETARY Special to the Washington Post​

The Club PUBlication 04/18/2022

​SOLAR POWER SURGES DURING ENERGY CRISIS​Renewables are accelerating, but the wind industry lags due to regulatory roadblocks in the European Union.By DAVID FICKLING • Bloomberg News​SOLAR

The Club PUBlication 04/11/2022

​One of the world’s hottest places lags on climate actionRecord heat waves are roasting Kuwait, threatening not just birds but people, too.​By ISABEL DEBRE Associated Press

The Club PUBlication 04/04/2020

​Now is a great time to invest in i-Bonds​CHRIS FARRELL

Archives

FILING IS A NIGHTMARE

By MICHELLE SINGLETARY
Special to the Washington Post

SOLAR POWER SURGES DURING ENERGY CRISIS

Renewables are accelerating, but the wind industry lags due to regulatory roadblocks in the European Union.
By DAVID FICKLING • Bloomberg NewsSOLAR

One of the world’s hottest places lags on climate action

Record heat waves are roasting Kuwait, threatening not just birds but people, too.

By ISABEL DEBRE Associated Press

Now is a great time to invest in
i-Bonds

CHRIS FARRELL