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by Pete Sepp
The president's proposal to eliminate tax breaks would further handicap the bleak unemployment situation
Pete Sepp is executive vice president of the
In an effort to ensure U.S. industries remain competitive in the global market, our tax system offers limited protections for American companies, including energy firms, from the perils of double taxation. Though many anti-oil activists (and their allies in the current administration) attempt to diminish these vital tools when it comes to our fossil fuel industry, the facts point to the contrary.
Far from qualifying as selective or excessive government fiscal policy, many of the tax rules President Obama brands as "oil subsidies" are actually credits available to any U.S. manufacturer -- from microprocessor producers like
Consider this: since 1981, oil and natural gas firms have paid more in taxes than their shareholders have earned in profits. Specifically, between 1981 and 2008, the oil industry paid more than
Federal tax policy doesn't operate in a closed loop. So the fact that ours is the only major country in the world to tax foreign income significantly impacts domestic investment and economic growth. A
The elimination of these protections would also further handicap our already bleak employment rate. One 2010 study estimated the economic costs of repealing tax credits such as "dual capacity" and Section 199 (a provision available to all American manufacturers to encourage domestic employment) would total over 154,000 jobs lost in 2011 alone, not only in the energy sector but across the whole economy.
Such a move would also result in more than
IHS-CERA Chairman Daniel Yergin warns that if the
If our national leaders intend to "win the future," we will need policies that are truly progrowth. Systemic tax reform for all businesses, emphasizing lower rates, simplicity, and fairer rules for foreign-based income, could obviate provisions like Section 199 and dual capacity credits. But until Washington takes this holistic approach, proposals that single out an industry for punitive taxation deserve defeat.
Obama Tax Proposal Would Only Hurt American Energy Competitiveness | Politics
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