A tax proposal in this bill known as Dual Capacity taxation, would actually eliminate credits for taxes paid overseas only for American oil and gas companies – ending an important, job creating credit that will continue to be enjoyed by all other domestic manufacturing sectors. This proposal essentially double taxes US domestic oil and gas firms, placing them at a competitive disadvantage against foreign companies like BP. This discriminatory tax hike will make it impossible for U.S. companies to compete globally, making this proposal essentially a subsidy to foreign companies like BP and China’s government run CNOOC.
The bill goes on to further attack domestic energy jobs through the elimination of incentives for offshore drilling domestically, known as Section 199 credits, and changes to the liability requirements for offshore drilling that essentially make offshore activity economically unfeasible for big and small producers alike.
Taken together, these proposals deliver a one, two knockout punch to the industry, making US energy companies less competitive, while simultaneously making the US in general a voraciously unfriendly place to develop energy resources.
As we recover from the recession, the Obama administration has wisely made job creation the number one priority. Unfortunately, the actions of Congress, as well as the President’s own budget proposal, are not mirroring this commitment. Increased energy prices resulting from the blatantly propagandized “Close Big Oil Tax Loopholes Act,” will increase business costs economy wide, while simultaneously eliminating energy jobs and hurting our energy security.
A recent article in the Washington Times nicely summed up what would seem to be a common sense goal for our national energy future, a goal which this misguided legislation ignores:
Let’s hope that the majority of Congress can see past the rhetoric to the real people who will feel economic harm as a result of this bill.
