On The Right
There Goes Obama Again, Misleading About The Energy Industry
As Ronald Reagan famously said, "There you go again."
Of course, Reagan was blaming Jimmy Carter for launching false
attacks during a debate. And that line was so effective, it not only
helped Reagan win the debate, but a presidential election that would
change American history.
But "there you go again" can apply equally to President Obama. Once
again this week, the president was out on the campaign trail bashing and
oil and gas companies. And he continued to spread major falsehoods
about this industry, which I guess is the polite way to put it.
Obama is obsessed with oil and gas. He is a prisoner of the left-wing
environmental groups. And really, he's extending his leftist
class-warfare attack from rich people to successful oil and gas
producers.
What seems to have Obama especially steamed is the fact that the
conventional-energy companies are profitable. Especially the five
largest. So he wants to tax them. He then wants to redistribute their
income to his favorite green-energy firms. Sound familiar?
I don't know which is more important to the president — the fact that
he hates fossil fuel, or the fact that he hates success. Or that he
wants an energy-entitlement state. But here's what I do know, factually.
Oil companies have an effective corporate tax rate well above 40%.
And they operate within one of the highest-taxed industries in America.
According to the Tax Foundation, for more than 25 years, oil and gas
companies have sent more tax dollars to Washington and state capitals
than they earned in profits. That's a fact.
Single-handedly, oil and gas companies finance over 10% of nondefense
discretionary spending within the U.S. budget. According to the Wall
Street Journal, Exxon Mobil, the world's largest energy firm, paid out
$59 billion in total U.S. taxes over the five years prior to 2010 while
earning only $40.5 billion in domestic profits.
And Obama wants to raise taxes on conventional-energy firms by
somewhere between $40 billion and $80 billion? Whatever happened to the
supply-side principle that if you tax something more, you get less of
it?
But with gasoline prices headed towards $5 a gallon, and with oil
prices over $100 a barrel, virtually the whole country outside of the
White House wants more oil, more retail gas for the pump and more energy
supplies everywhere in order to bring prices down. Raising taxes won't
do it.
Make no mistake about it: Fossil fuel is going to drive the U.S. economy for decades to come. Green energy is not.
Obama's other line of attack is that oil companies shouldn't get any
subsidies. They made too much money for that. Well, I'm against oil
subsidies. There's about $90 billion worth in the federal budget. Better
to end them, slash corporate tax rates across the board, and let the
free market decide energy policy and production.
But on the subject of subsidies, so-called renewable-energy subsidies
(think Solyndra) are 49 times greater than fossil-fuel subsidies,
according to studies by the Congressional Research Service. And the
Congressional Budget Office says renewable green energy received 68% of
energy-related tax preferences in fiscal year 2011, while fossil fuels
got only 15%.
Additionally, oil, natural gas, and coal received 64 cents per
megawatt hour in subsidies, while wind power alone received $56.29 per
megawatt hour. That's 100 times what fossil fuels got.
By the way, the so-called subsidies that Obama is talking about are
really depreciation write-offs for investment. Oil companies get a 6%
deduction from income. Most manufacturing industries get 9%. And every
company in the economy is eligible for faster investment write-offs.
Frankly, the most pro-growth corporate-tax policy would be 100%
cash-expensing for new investment, a slashed corporate tax rate, and no
more subsidies, preferences and carve-outs. That would be a huge
job-creator.
But Obama is too busy spewing falsehoods to support his ideological
agenda than to take account of the facts. And while he's at it, one of
the greatest, pro-growth revolutions ever is taking place right under
his nose. It's the oil and gas shale miracle, which if left unfettered
will turn America and Canada into an energy-independent New Middle East
inside of 10 years.
In fact, the collapse of natural-gas prices brought on by this
revolution could become one of the biggest tax cuts for the economy in
history, making all our industries vastly more competitive,
revolutionizing transportation, and providing more consumer real income
at home.
Obama should quit the demagoguery, stop bashing oil and gas, stop
taxing success, and let our ingenious, creative, free-enterprise private
economy spur America to a new generation of prosperity.
No comments:
Post a Comment