Now consider the politically driven attacks on the oil and gas industry which are described, in disingenuous terms, as an effort to close “loopholes” and “special breaks.” The Obama Administration and its allies in Congress are pushing what amounts to tax increases aimed at energy firms. We should all be concerned. These are the businesses that America depends on to power the economy with affordable energy, fund new technologies, and support good paying jobs for more than 9 million working men and women throughout the economy.
One of the most flagrantly ill-advised measures now on the table is a plan that Finance Committee Chair Max Baucus (D-MT) recently crafted to fund a small business jobs bill. He would pay for his bill by hiking taxes on domestic energy production through the elimination of the Section 199 manufacturing deduction for only American oil and gas companies. The original goal of the Section 199 deduction was to spur job growth among all American manufacturers. Those who want to eliminate the Section 199 deduction for energy companies are characterizing it as a “tax break” that is unique to oil companies and therefore unjustified: It is no such thing.
Politicians intent on making political hay by going after so-called “Big Oil” conveniently omit the fact that this sector receives less in targeted tax incentives than renewable energy. Even using one of the political left’s favorite terms, renewables will receive a yearly average of almost 13 times as much in “tax expenditures” as integrated oil and gas firms. That’s according to a recent National Taxpayers Union analysis of Joint Committee on Taxation data. What’s more, renewable energy still fails to stand on its own after three decades of heavy subsidization and consistently increasing federal support.