Marita Noon
We all know that each president has his own unique pet projects. He
talks about them during the campaign, and we expect him to act on them
once in office. Even the first ladies have their favorite causes
which influence policy.
We should not be surprised then that President Obama has directed
billions of dollars to green-energy projects, such as Solyndra, and that
he continues to push though measures that punish petroleum—believing he can make winners and losers.
But directing policy based on waves of popularity—rather than fact,
makes as much sense as taxing or providing federal funding to Barbie
Dolls.
Remember a decade or so ago, there was public attention drawn to
eating disorders such as bulimia and anorexia? Specialty clinics sprang
up to treat the young women who were engaged in unhealthy habits. Barbie
dolls got criticized because it was said the unnatural body shapes
contributed to young girls’ unrealistic expectations regarding how they
should look.
Barbie fell from favor—though she still sells. Along came Cabbage
Patch Dolls with their chubby cheeks and fat fingers. Bulimia and
anorexia may still be a problem—but we do not hear much about them
anymore. Today, the First Lady’s cause is obesity.
Using the President’s model of punishing one energy source while
showering the other with funding—perhaps we need to offer stimulus to
Mattel so they can make more Barbies, lower their price, and use
advertising to sway public opinion toward Barbie again. Meanwhile, we
should heap penalties on their sales of Cabbage Patch Dolls. It would
presumably save money in healthcare, because we’d make being thin
desirable again.
Obviously a Cabbage Patch tax or a Barbie stimulus is silly. But so is what President Obama is doing with America’s energy.
On the very same week that the Obama administration is rushing to
send stimulus out the door for questionable renewable energy projects
that must be funded by the end of the month, he is also trying to sell Congress on singling out the oil-and-gas industry—penalizing them just because he doesn’t like them.
If we put a penalty on Cabbage Patch Dolls and mandated that people
buy Barbie it would be silly—but that is all. When we subsidize
expensive renewables and add costs to the lower-priced oil and gas—we
punish all Americans, as everyone needs transportation. Plus, higher
energy costs impact the price of everything else.
Just as Barbie and Cabbage Patch doll sales will be determined by the
free market, the same should be true for our energy sources. If
consumers want to pay more for renewable energy, that should be their
choice. But it should have to compete fair and square. Both renewable
energy and the traditional oil and gas should receive the same
deductions for business expenses and, especially in this economy,
neither should be getting federal funding like the $7 billion a year in ethanol subsidies.
With Solyndra and the stimulus-fund-disbursement deadline in the
news, we all know about renewable energy’s favored status. But hidden in
the talk of taxing billionaires is punishment for the energy that fuels
America—just because President Obama doesn’t like it.
Americans for Tax Reform
has assembled a quick summary of all 14 tax hikes in the so-called
“jobs plan.” More than 70 percent of them target the oil and gas
industry. Even if you think that, for example, a company should not be
able to deduct costs associated with drilling in the year the expense
occurred—as is the case now; even if you think that energy companies
should be singled out to have the manufacturer-tax deduction taken away
while other industries keep it; and even if you think oil and gas
companies should have to pay US taxes on money that has already been
taxed in other countries, you know it will increase the costs to the
energy companies.
As Kathy Ozanne, in a comment on the ATR page,
said, “econ 101…Corporations never pay taxes, their customers do.” The
cost increases brought on by President Obama’s “jobs plan” will serve as
a tax on everyone and ultimately kill jobs in the one industry consistently creating jobs. He plan is to raise more than $40 billion in new taxes from the oil-and-gas industry—which you and I will pay.
The facts show that the President’s tax plans, which
disproportionately punish oil and gas will have a net negative impact on
revenues and result in more job losses. A recent study
by nationally-renowned economist Dr. Joseph R. Mason evaluates the
impact of just two (Dual Capacity and Section 199) of the 10 oil and gas
industry-targeted tax changes the President has planned. Mason found
that the revenue loss will be greater than the additional funds the tax
code changes will bring in and that 155,000 jobs will be lost.
Mason says: “A far more meaningful approach would be reforming
federal tax and business policies that encourage economic growth.
Expansion of oil and gas exploration and production on the Outer
Continental Shelf, for example, would generate an estimated $11 billion
annually in Federal tax revenue in the short run, and $55 billion
annually in Federal tax revenue in the long run.”
Petroleum may not be “popular,” but it still sells.
The president’s rationale for picking the oil and gas industry for
punishment is the large dollar figure he can quote regarding their
profits—yet their profit percentage is smaller than most industries
(about one-third that of the beverage industry and one-quarter the
profit percentage of the computer industry). In support of the
President’s approach, people often say, “But I do not have to buy a
Starbuck’s coffee. I have to buy gas”—as if that means the companies
should not make a profit. But now people do not have to buy gas. They
can get a government subsidy to buy an electric car. But, wait! The
President’s policies are shutting down the coal-fueled power plants that make comparatively cheap electricity and are propping up the expensive solar industry.
It makes about as much sense as subsidizing Barbie Dolls and taxing Cabbage Patch Dolls to save on healthcare costs.
The President’s plans are silly—or are they sinister?
