Thursday, April 9, 2009
Tea Time for Obama’s Budget
Punitive Taxes Target Oil and Gas Companies – Just When we Need them Most
Care for a spot of tea? Some 5,000 Cincinnati residents did recently when they convened in Fountain Square to protest President Obama’s spending and taxation policies.
Its strategy and tactics loosely modeled on those of the original Boston Tea Party, the New American Tea Party Movement, promoted by the Coalition Opposed to Additional Spending & Taxes (COAST), is upset about how the Obama administration plans to spend money on stimulus programs and corporate bailouts, while raising taxes to pay for it.
The president’s budget is proof of his heavy-handed approach to taxation. At a whopping $3.6 trillion, the proposed budget has been termed “unsustainable.” It also unfairly targets certain industries for what is nothing short of punishment.
One example is his proposed treatment of the oil and gas industries. In this case, he singles out oil and gas companies for repeal of the Section 199 manufacturers’ deduction. This repeal alone will cost the oil and gas industry $13 billion. No other companies receiving this deduction will lose it under the president’s proposed tax package.
Additionally, the oil and gas companies with their use of our nation’s fossil fuels could create as many as 270,000 jobs during the exploration phase on the Outer Continental Shelf. However, the president’s Interior secretary has slowed development of the OCS five-year plan, drawing to a halt OCS exploration. That puts the oil and gas companies’ infusion of investment capital and the creation of new jobs on hold, thereby slowing our country’s economic recovery. Such action extends our country’s reliance on foreign oil, worsening our energy security and losing out on the potential to create jobs. Compound this with the repeal of the manufacturing tax deduction for these industries, and consumers stand to pay exponentially more to fill our gas tanks and heat our homes.
The president has made it clear he favors new energy technologies, such as renewables like wind and sun. But the ability to make renewables workable, scalable, available and affordable is about 10 years away. The U.S. needs traditional energy sources now as a bridge to the renewable and alternative energy sources the president envisions. His proposed $3.6 trillion budget has little except downside. It costs too much. It spends too much. It borrows too much. And it causes way too much collateral damage along the way.
A spot of tea? Yes, I think I will; please join me. The recent New American Tea Party Cincinnati just hosted was the biggest protest in this city since the Vietnam War. I predict similar records will break all over Ohio – as they should on this issue.