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Voters Sour Over Democrats' Tax Proposals

The opinions expressed by columnists are their own and do not necessarily represent the views of

With the hotly contested midterm elections just a few weeks away, many political observers believe that Democrats in Congress have made a series of serious blunders on taxes. Indeed, while they left Washington without voting on the extension of the Bush tax cuts that are set to expire at the end of this year, they have also been relentless in their push for new taxes on U.S. energy producers. As many of us in the small business community have been telling Democrat leaders all along, such a move would do serious damage to our economy and jobs, as well as the pocketbooks of American consumers and entrepreneurs.


Over $80 billion in increased taxes on oil and natural gas producers remain on the table, which have been proposed by President Obama in the 2011 budget and contained in various pieces of legislation floating around on Capitol Hill. While most Americans understand that higher taxes mean higher consumer costs and less activity by the industries or people that are targeted, it seems that the Democrats just don’t get it. And make no mistake; there will be a price to pay at the ballot box.

Middle class families, small business owners, and a variety of other Americans are worried about the effects of higher taxes on our economy and jobs. Particularly in this sputtering economy, they don’t understand how politicians can’t seem to connect the dots that higher taxes will lead to higher fuel prices, fewer jobs and more expensive consumer goods and services.

There is plenty of solid analysis to back up the effects of higher energy taxes on the economy. For example, a recent study conducted by Louisiana State University economist Dr. Joseph Mason estimates that congressional approval of just two of the proposed tax increases (repeal of the manufacturing tax credit for oil companies and elimination of the dual capacity tax deduction) would cost our nation close to 155,000 jobs and decrease U.S. GDP by almost $350 billion. It would also mean an annual loss of $83 billion in much needed tax revenue to support public services and about $68 billion in lost wages for U.S. workers.


The hard-hit Gulf Coast region, already decimated by the drilling moratorium ordered by the administration in response to the Deepwater Horizon spill, would be heavily impacted. Over a third of all the jobs lost nationwide would come from this area -- states that have already seen a significant portion of their traditional employment base of high-paying energy industry jobs slipping away.

Eliminating these two tax deductions would also hinder domestic production of natural gas, the clean-burning fuel that many people see as the key to an abundant, ecologically sound energy supply in the future. An analysis done by Wood Mackenzie found that these tax increases would put at risk anywhere from 300,000 to 600,000 barrels of oil equivalent per day in 2011 and jeopardize more than 10 percent of total U.S. production capacity by 2017 -- another substantial blow to America’s economy and its energy supply.

This serious threat to job creation and the U.S. economy may be acceptable to Democrats in Washington, but average Americans are concerned. Harris Interactive surveyed registered voters in ten states and found that 64 percent oppose these tax increases on America’s fuel supply. About 46 percent said they strongly opposed them -- a number that Democrats who are worried about retaining their seats in Congress should take to heart.


Poll after poll has demonstrated that improving the economy and creating jobs are the top priorities for Americans. Adding additional taxes that will burden businesses with higher energy and transportation costs, as well as raise prices for families at the gas pump, will only work to hinder economic recovery.

When the country and economy is struggling, the government must tread lightly and tighten its own belt just like everyone else. Demanding more money from hardworking Americans and U.S. businesses is not only bad policy, it is really bad politics.

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