CYMI: Doubling Down on Tax Hikes in the Absence of Sound Policy Proposals
ICYMI: President Obama is doubling down on his bash-oil-companies rhetoric this morning, and reportedly plans to urge “Congress to vote to end the billions in taxpayer dollars handed out to oil companies every year” in his morning address from the Rose Garden.
There are no taxpayer dollars handed out to oil companies, but it is revealing of the president’s mindset when he refers to not taking even more of a company’s earnings as a “subsidy” and “handing out taxpayer dollars.” The attached article at the bottom of this email details what companies actually pay.
There’s no doubt that the Menendez bill will fail, as it did last year. Even Senate Democrats agree that their tax hike proposal will do nothing to lower the price at the pump. As the bill’s sponsor, Sen. Menendez, made clear: “Nobody has made the claim that this bill is about reducing gas prices.”
So why are we wasting time on it when high gas prices are putting the squeeze on Americans? The administration’s own words show that this is about politics and not good policy: after taking office, it justified tax hikes on oil companies by claiming that the current tax code somehow led to the “overproduction” of domestic oil, and was therefore “detrimental to long-term energy security” and “inconsistent” with the administration’s preferred cap-and-trade program.
When the president talks about “subsidies,” he’s apparently talking about the Manufacturing Tax Credit (the “199” provision). U.S. manufacturers of all types use this credit. By an overwhelming bipartisan vote of 92-5, the provision became law in 2004 after the Senate passed the Jumpstart Our Business Strength (JOBS) Act. .
The president repeatedly conflates not taking even more money from oil companies through higher taxes with actual subsidies such as the government giving cash to Solyndra. By this logic, any dollar earned but not seized by the government is a “subsidy” for which we should feel grateful.
This is surprising since in his State of the Union earlier this year, the president said: “if you’re an American manufacturer, you should get a bigger tax cut.” Apparently, he meant only certain favored manufacturers should get a tax cut – and it’ll be called a “subsidy” if you’re not on the list.
This isn’t about addressing gas prices. This is about President Obama and Majority Leader Reid trying to gain political advantage by claiming that by promoting increased supply and acknowledging basic economics, Republicans are defending Big Oil. That’s frustrating and disappointing because it reveals that Democrats have no real energy policy solutions to offer. Given the magnitude of the strain that rising energy prices are placing on American families – that’s downright scary.
This is the first and only time in this Congress that the Senate has taken up energy legislation on the floor. Republicans have not been allowed a single amendment to grant access to a single drop of oil – even though both the president and the bill’s sponsor have publicly conceded that increased domestic oil supply can help lower prices.
Robert Dillon. Communications Director at U.S. Senate Energy and Natural Resources Committee
The industry sends more money to Washington than to shareholders
Wall Street Journal editorial, March 14, 2012
President Obama says he wants to end subsidies for what he calls "the fuel of the past," but lucky for him oil and gas will be the fuels of the future too. His budget-deficit blowout would be so much worse without Big Oil, because the truth is that this industry is subsidizing the government.
Much, much worse, actually. The federal Energy Information Administration reports that the industry paid some $35.7 billion in corporate income taxes in 2009, the latest year for which data are available. That alone is about 10% of non-defense discretionary spending—and it would cover a lot of Solyndras. That figure also doesn't count excise taxes, state taxes and rents, royalties, fees and bonus payments. All told, the government rakes in $86 million from oil and gas every day—far more than from any other business.
Not paying their "fair share"? Here's a staggering fact: The Tax Foundation estimates that, between 1981 and 2008, oil and gas companies sent more dollars to Washington and the state capitols than they earned in profits for shareholders.
Posted: March 29, 2012