Today’s Washington Examiner posted an article by Bill Dickens, senior economist specializing in network economics for Tacoma Public Utilities in Tacoma, WA, and an adjunct Professor of Economics at Florida A&M University. The article describes the impact on the Gulf States of two tax proposals currently being discussed by Ctongress. Both tax proposals have to do with the production of domestic energy and the companies who produce domestic energy.
The first proposal is to change the way income earned abroad is taxed. Under current laws, income that is earned abroad and taxed (and paid) abroad is not taxed again by the United States. Changing this policy would put American-owned businesses at a disadvantage against companies owned in other countries. At a time when the American economy is struggling, do we really want to make American companies less competitive?
The second proposal involves the repeal of a tax section known as Section 199. This tax credit was enacted six years ago to encourage job growth in all American industries–from auto manufacturing to the film industry. However, Congress is calling for a repeal of this tax credit only in the oil and gas industry. This is a targeted tax change that will only impact the oil and gas industry. Is that really a good idea right now?
When gasoline prices reached $4 a gallon during the end of the Bush Administration, President Obama stated on one of the Sunday morning shows that he did not have a problem with the idea of $4 a gallon gas, the problem was that the price had risen too quickly. Looking at the policies of the Obama Administration in the area of domestic energy production, I believe we are moving into an error of very expensive gasoline. Although gasoline prices are reasonable now, if the ban on drilling in the Gulf continues and Cap and Trade legislation is passed, I believe we will see $5 a gallon (or more) gasoline prices by the end of the winter.
Domestic energy production is a matter of national security as well as economic security. I am hoping that the elections in November will give us a Congress that will better protect both our national security and our economy. The current Democrat Congress is doing neither.