Dems use oil spill as excuse to raise energy taxes

As if lawmakers did not already punish American oil companies heavily enough, because of the Byzantine system of laws that surrounds international taxation, companies have compelling reasons to cease American operations altogether. While the rest of the developed world has moved to a “territorial” system of taxation whereby only money made in the country faces a tax liability, the U.S. retains a “worldwide” system that taxes money made anywhere in the world by a U.S. company, leaving them prey to foreign competition with lower tax bills.

To ease the situation, Congress has created a series of exclusions, deferrals, deductions, and credits to prevent paying taxes twice on the same income. Thanks to years of revenue-hungry politicians, these palliatives have become divorced from their missions, yet removing them, as this bill does, without moving the U.S. to a more sensible system of territorial taxation does nothing other than penalize companies that elect to operate in the U.S. or maintain headquarters here. In short, all that these tax increases do is penalize American workers by giving their employers reasons to offshore, scale back, or lose ground to foreign competition.

These energy bills are typical of the Obama Administration’s motto, “never let a crisis go to waste.” Democrats are selling these bills as a response to gushing oil. In reality, they are using the Gulf as a means to their end– higher taxes.

Christopher Prandoni is a Federal Affairs Manager at Americans for Tax Reform.