Jane Van Ryan
Posted August 9, 2010
Americans get it. With their appreciation for freedom, opportunity, and fairness, they instinctively know that legislative proposals to raise taxes on some companies but not others are bad for business and bad for consumers. And yet, some of the people who've been elected to public office insist on trotting out new tax proposals that strain the American sense of fair play.
Sen. Max Baucus (D-Mont.), for example, wants to prohibit the five largest oil companies from using a standard tax deduction. The Senate Finance Committee, which Sen. Baucus chairs, says the deduction's goal--to encourage the production of more domestic energy--hasn't been met.
Never mind that companies aren't allowed to drill in many of America's most energy-rich areas. Never mind that oil companies already have an effective tax rate of 48.4 percent, which is nearly double that of other industries. That's not part of the committee's or the senator's thinking. Sen. Baucus needs to pay for a small -business jobs bill, and he's looking for deep pockets to pick. And let's face it: the five largest oil companies, which include BP, are convenient targets at the moment.
But how could higher energy taxes like this one affect consumers and the U.S. economy?
- Bernard L. Weinstein of Southern Methodist University says in Investor's Business Daily that higher taxes "will mean less, not more, domestic energy production...Adding to the industry's tax burdens at this time will destroy high-paying domestic jobs, shift more production overseas and retard the pace of economic recovery."
- Aaron Jack, a Kansas state representative, writes in The Wichita Eagle that higher taxes "will kill exploration and development and have the concomitant effect of driving prices for everything from gasoline to home heating oil ever higher."
- Former Rep. John Peterson argues in the Centre Daily Times higher taxes on domestic companies "is tantamount to a de facto subsidy to [foreign oil] companies." He adds that higher taxes "will increase energy prices, send good paying jobs overseas, weaken our national security and further boost foreign dependence."
Thousands of Americans agree with their comments.
CFIF President Jeffrey Mazzella is encouraging members of Congress to listen to their constituents during the August recess. "If they don't," Mazzella says, "thousands of jobs will be lost, investments in new exploration and production projects will be cut and millions of dollars that could further stimulate our economic recovery will disappear."
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