Punishing a true stimulus

Recently, a bill was introduced by California Representative Henry Waxman that, if passed would effectively raise the marginal tax rate on oil and gas companies. What amounts to a punitive measure by a liberal member of the U.S. House is in keeping with the policy measures of an overly ambitious Democratic Party majority. The repeal of the Section 199 deductions for oil and gas companies will hurt our interests in three key ways.

First, a tax increase on oil and gas will pass through to consumers at a time when we can least afford to see consumer spending on goods and services erode further. According to the Bureau of Labor Statistics, we have seen the steepest drop in consumer spending since the beginning of the measurement. Further taxes on energy will only prolong this downturn.

Second, U.S. national security is undermined when we raise taxes on U.S. oil and gas companies. The issue of energy independence is not one where we have an option; we must allow our oil and gas companies use their resources for research and development for new sources of energy, not for tax dollars to be spent on government programs that have little or no return on investment.

Third, it is wrong for Congress to give money to industries that are struggling and pay for it by raising taxes on those that are healthy. Such measures move us philosophically backwards in encouraging companies to produce more profit through more efficient operations. Instead it seems that Mr. Waxman and The White House have decided that in order to support out-of-control spending and government intervention in dying business models they are going to tax everything they don’t like, even if it hurts the nation as a whole. In an effort to pay for “stimulus” by raising taxes on oil and gas companies, they are actually hurting a crucial underpinning of economic recovery; low energy prices.