IN THE NEWS
In the wake of the Senate’s bipartisan rejection of his latest jobs bill, recently described by Steve Forbes as “a glorified repackaging of tax increases that have rightly failed several times before,” President Obama and congressional Democrats are now clamoring for a national energy tax. In his speech to a joint session of Congress in September, President Obama called for ending “taxpayer subsidies” to oil companies. However, as Forbes explains, U.S. oil and natural gas companies do not receive special taxpayer subsidies that are not already available to a “broad swath of other U.S. companies.”
The provisions [the President is] targeting for repeal are the same tax credits and deductions available to a broad swath of other U.S. companies — including a domestic manufacturing credit and a measure to prevent double taxation on income earned abroad.
As Forbes explains, “Repealing tax credits and deductions for only one industry […] is the opposite of tax reform. It’s a classic Washington game of using the Tax Code to pick winners and losers.” Further, “the influx of revenue [that is] expected from rolling back these fossil-fuel ‘subsidies’ [is] close to $90 billion when factoring in the effects on related industries.” This amounts to a $90 billion national energy tax that will “likely come straight from the pockets of American consumers.”
Forbes also rebuts the misguided notion that oil and natural gas companies don’t pay their fair share of taxes.
The industry is taxed at an effective rate of 41 percent. For comparison, the average tax bracket for industrial companies is 26 percent. The oil and gas industry pays its fair share. If the president were really interested in creating jobs and economic growth, he would support more domestic energy production rather than punitive tax increases.
According to Forbes, instead of trying to blame congressional Republicans for his own failure to advance a jobs plan “in an economy that’s averaged 9 percent unemployment and crossed the $1 trillion deficit threshold for the third straight year,” the President should support policies that encourage domestic energy production. Forbes concludes:
If the administration were serious about job growth and deficit reduction, it would stand down from its “jobs” plan that would only further handicap an industry that stands ready to contribute thousands of new jobs. Otherwise, cue the collective grumbling at the gas pump.
WHAT ARE HOUSE REPUBLICANS DOING?
The American Energy Initiative is an ongoing effort by House Republicans to address rising gasoline prices and expand American energy production. As the President continues to pursue counter-productive policies that harm consumers and discourage the production of American energy, House Republicans are committed to finding sensible solutions to families’ rapidly rising energy costs and putting Americans back to work.
The Jobs Through Growth Act, which builds upon the good work already done by House Republicans, would tear down barriers to American energy production and lower the price of gas, creating jobs and growing the economy in the process. The bill would reduce red tape, mandates, and prohibitions that artificially increase the price of gasoline and give Americans better access to energy resources by curtailing frivolous litigation and unlocking areas for exploration both on and offshore. House Republicans understand that real job growth comes from growing the economy, not the government.