While many Gulf residents continue to suffer from the fallout of the oil spill disaster, it appears that others are viewing the tragedy as a stroke of good fortune. The Deepwater Horizon incident has served as an impetus for environmentalists to ram through liberal policies in Congress. Left-wing groups have manipulated the facts in an effort to impose huge tax increases on American businesses and consumers.
A memo was recently leaked to the press exposing the work of the liberal firm Clean Energy Works (CEW). The memo exposes a new campaign strategy to spin new tax increases as a “Big Oil Welfare Tax.” These groups are capitalizing on the public’s hostile reaction from the spill in an effort to create animosity towards the entire oil and gas industry. They hope the public’s resentment towards BP will translate to support for massive new taxes on American energy companies.
CEW’s campaign received a huge boost when a New York Times reporter took the bait and published their propaganda in a recent article, “As Oil Industry Fights a Tax, It Reaps Billions from Subsidies.” I recently read a great point by point rebuttal to this article by Andrew Langer of the Institute for Liberty. Langer’s analysis clearly exposes blatant misrepresentations of the U.S. tax code in the article, that obviously support the messaging goals outlined by CEW.
The end goal of CEW’s strategy is to use the Gulf disaster – an incident that the foreign owned BP is responsible for – to change existing tax code, forcing U.S. oil and gas producers to pay more taxes on income earned from international operations. This ludicrous proposal places our own domestic oil companies and the American workers they employ at a competitive disadvantage, and benefits foreign competitors, including BP and state-owned companies such as Chinese owned CNOOC. Clearly, there is an alternative agenda behind such an outrageous proposal.
The New York Times article provides us with the alternative motive in its mention of Senator Robert Menendez (D-NJ), the Senate sponsor working with the administration to re-write existing tax laws to eliminate the “dual-capacity” rules that currently make our domestic oil and gas industry competitive with foreign companies. The reporter positions this proposal as legislation that would cut “tax breaks” and “subsidies” to oil companies.
In reality, Menendez’s plan would pose changes to a tax policy that has been on the books for over 25 years which provides an even playing field for U.S. companies in the global marketplace. The “tax breaks” referenced by Menendez are credits received by every U.S. business, that allow U.S. companies to offset income taxes that have already been paid in foreign countries. Elimination of dual-capacity rules would result in double taxation of U.S. energy companies and give foreign competitors a competitive advantage. Simply put, our government would deliver huge subsidies to foreign companies like BP.
Double-taxing our domestic energy producers will force American companies to cut even more jobs at a time when Americans are hurting to make ends meet. And the impact is huge – our nation’s oil and gas producers currently support more than 9 million American jobs.
Ironically, foreign companies like BP are benefiting from CEW’s smear campaign. It is almost like they are rewarding bad behavior. Putting domestic jobs at risk, and handing over the future of our energy supplies to foreign competitors just doesn’t make sense. If Congress falls for this biased view of tax policy, U.S. consumers will be footing the bill to subsidize a giant BP bailout.
And for senior citizens this dependence on foreign sources of energy is not only an economic issue it is now, without question, a clear and present danger to our national security.
Jim Martin is the Chairman of the 60 Plus Association, a non-partisan seniors advocacy group with a free enterprise, less government, less taxes approach to seniors issues.