In effect, repealing the Section 199 deduction for oil and gas companies would amount to a federal tax hike, raising rates from 32.9 percent to 35 percent. What happens when tax rates are increased? The result will unavoidably be higher energy prices on small businesses and families, at the precise moment that they are struggling with an ailing economy.
This is the price all of us will pay unless we can find a way to be honest about the realities of our tax system. It’s reducing our comparatively high level of tax rates overall – not “tax breaks” – that should be occupying elected officials. Furthermore, risking the broad effects of higher energy prices on economic growth to support a ‘jobs’ bill is backwards, misguided policy.