“…First, of all..” Mr. Obama began, “You’ve got oil companies making record profits…no… no companies in history have made the kind of profits the oil companies are makin’ right now…They..they…….one company, Exxon Mobil, made eleven billion dollars…billion, with a “b” ….last quarter….they made eleven billion dollars the quarter before that…makin’ money hand-over-fist…makin’ out like bandits…”
The spite and indignation over profitable American companies got the election year crowd fired-up. Yet candidate Obama’s proposed “solution” to the dilemma in August of 2008 was the same then, as it is now: raise taxes on oil companies. His rhetoric fails both in terms of basic economics, and in terms of sound energy policy. But this, apparently, is what President Obama knows, and he will not be deterred.
Beyond the folly of the President’s “tax our way to more energy” strategy, there is the disingenuousness – and the inaccuracy – of the President’s repeated claims of ‘tax subsidies” and “tax breaks” for oil companies. Despite the obvious political strategy of creating a evil demon from which he is attempting to rescue us, President Obama’s loosely worded claims about the oil industry and taxation rates are not only false, but it is harmful.
For the record, when President Obama decries “government subsidies” for the oil industry, what he is actually conveying is his opinion that the oil industry is not taxed at a sufficiently high rate. This is to say that oil companies are being “allowed” to keep more of their own money than President Obama thinks is fair, and he chooses to label this matter of “keeping to much of your money” as a subsidy.
Keeping one’s own money – whether we are speaking of a private individual or an organization – is NOT the same as being paid a “subsidy.” And oil companies are already taxed at a marginal rate of approximately 41%, as compared to an approximate rate of 26% among the other companies on the S&P 500. Yet journalists repeat the President’s claims about “oil subsidies” as though they were factual – which leads us further and further away from sound energy policies.
Anger, vilification, demonization, and misinformation. This is not the essence of leadership, and it does not unite our country. Indeed, it leads to further division – and more energy chaos.
Austin Hill is an Author, Consultant, and Host of "Austin Hill's Big World of Small Business," a syndicated talk show about small business ownership and entrepreneurship. He is Co-Author of the new release "The Virtues Of Capitalism: A Moral Case For Free Markets." , Author of "White House Confidential: The Little Book Of Weird Presidential History," and a frequent guest host for Washington, DC's 105.9 WMAL Talk Radio.