Memorial Day opened the summer driving season; summer starts mid-term campaigns. Some candidates will our pound our ears about “oil subsidies” and the “need for new investment” in alternative energy. As the late Senator Russell Long said, “If you want more of something, subsidize it; if you want less, tax it.”
Clearly these candidates want less oil and gas. That’s insane – why?
First, they misuse the term “subsidy.” These tax benefits apply to every company. These candidates want to end them for US oil companies to get new revenues for pet projects and companies – Wind, solar and ethanol boosters get grants, direct US investment, non-recourse loans, mandated product use, even tariffs to preclude competition. They want “only a few more years” of subsidies that have cost billions of dollars over decades of government largesse (waste).
Second, they would end US oil company eligibility for US Tax Code credits granted to every company. One applies to any company that creates manufacturing and production jobs (energy has created more new US jobs than any other sector). One spurred private R&D for new technology used to find and develop oil and gas in impossible water depths (1 mile then; now more than 4 miles). One allows US credit for taxes paid to host nations for US company operations in those countries.
Third, changing treatment of US companies (only) effectively doubles taxes on an industry that pays more taxes than any other. American competitiveness would be crushed, as Russian, French, Chinese and national oil companies reap US tax benefits for their operations here.
Fourth, targeting energy slams our economy. Energy drives our economy, but higher taxes (costs) cut jobs and production and raise prices. Oil and gas make fertilizer and fuel to plant and reap crops. Factories need electricity; products must be delivered; homes, businesses and schools must be heated and cooled; fuel tanks – from family autos to airliners – must be filled. The list goes on.
Analytical and logical elected leaders know that targeting one industry hurts every American. But this is the political “silly season;” less savvy candidates will try to sneak new energy taxes. We would all pay the price of their folly.
