This is not idle speculation. Section 199 and dual capacity exist to take some of the worst pain out of a tax system that severely hobbles our businesses at home and abroad. In fact, a recent study by the Oxford University Centre for Business Taxation ranked the U.S.'s "Effective Average Tax Rate" for corporations as the second-worst among G20 countries, just behind Japan (which has been cutting its taxes). Getting rid of Section 199 and dual capacity for U.S. firms in the global race for energy development - without addressing the underlying problems they were designed to partially relieve - would be tantamount to handing a gift to our competitors abroad.
Simplifying the Tax Code through broadening the base while streamlining deductions and credits can add up to a serious tax reform plan - if tax rates are lowered across the board in the process. Selectively stripping provisions for certain companies while leaving high rates in place is the very antithesis of the overhaul our tax system needs.
It would also be the last thing our struggling economy needs. For example, in addition to raising the price of fuel for all American consumers, a tax hike on oil and gas production would jeopardize the more than 9 million jobs supported by this energy sector at a time when national unemployment has once again exceeded 9 percent. Our national energy industry is one of the few bright spots in a recovery that remains cloudy. Boosting its tax burden would eventually land on the shoulders of real, live people - workers, retiree-investors, and, of course, consumers at the pump.
The debt-ceiling debate should serve as an opportunity to enact prudent rather than punitive fiscal policies. Spending restraint and tax reform, not tax increases, are the way forward to prosperity.