Congress’s current lame-duck session is a Paul Revere moment for American companies, citizens and consumers. And as it comes to an end, hope for the best, but hold on to your wallets; prepare for the worst.
First, the lame ducks should not impose crippling taxes on U.S. oil companies. Small companies rely on “depletion allowances” and “intangible drilling costs” to keep onshore wells pumping; without those, they could go out of business. The biggest companies would go on, but $86 billion in new taxes would damage them competitively and boost the profits of exempted foreign companies such as BP, Venezuela-owned CITGO, Russia-owned LukOil, Chinese national companies and others. The lame ducks should not end U.S. deductibility of overseas tax payments, or the very effective incentives instituted by the Clinton administration to foster development of necessary technologies to engage in deep-depth drilling.
These changes would slash onshore production, cut offshore exploration and production, drive up energy costs for all Americans and businesses and cost hundreds of thousands of jobs. Congress would then use the $86 billion it hopes to collect from these new energy taxes, on pet projects, tax cuts and mandates for “green” energy. These energy taxes will damage our economy and worsen the job outlook for Americans.
Second, the lame ducks should not burden American families with huge new taxes as they struggle with continuing high jobless rates and foreclosure threats. New taxes would penalize home sales and eliminate Health Savings Accounts, Flexible Spending Accounts and death reimbursement accounts for medical purchases; medical insurance would be taxed as regular income. And the hideously unjust, 40-year old Alternative Minimum Tax will choke 28 million taxpayers with paperwork and higher taxes in 2011(up from 4 million in 2009). Other tax “changes” would add crushing new burdens on virtually every American household.
Sadly, the lame ducks have already passed an extension of the ethanol tax credit. The waiver from highway fuel taxes robs the Highway Trust Fund and numerous states; and the import tariff on sugar forces Americans to pay twice as much for sugar as anyone else. Ethanol has been oversold as an environmental benefit for 30 years. The price of sugar is at a 30-year high, due in part to growing directives for alternative energy. The subsidies and tariffs pick every American pocket; they should be ended.
It’s time to reverse these subsidies and reject these new tax proposals, in the name of fairness, logic, American competitiveness and good energy policy.