The Question of Tax Breaks for the Oil and Gas Industry

Today we see the spectacle of five CEO’s of the major oil companies being marched in front of the klieg lights to be grilled before the Senate Finance Committee. The democrats are demanding the repeal of tax breaks for the Oil and Gas industry to reduce demands for spending cuts to achieve deficit reductions. Some Republicans will be defending the continued bail out of the oil and gas industries. Unfortunately there is far more at stake here than the hyperbole of Senator Chuck Schumer (D-NY) would let on. Indeed the questions raised by the current energy price escalation and the deficit crisis are complicated and not easily answered. but key to America’s economic and strategic future.

21st Century American Energy Security is Central to Our Future

As a fiscal conservative I am opposed to any industry subsidies as they are just tax payer bail outs disguised as tax reductions. It drives me crazy to see so called conservatives arguing for industry specific tax breaks, regardless if they are for the oil & gas industry, farm price supports or the General Motors bail out. Simply put in a free market companies should manage themselves based on the market based supply and demand forces. When they interfere with those forces by way of collusion (price fixing) then the Justice Department should perp walk them straight to prison. Let the market do its thing, period. It has taken me years to come around to the Flat Tax but the excessive use of industry specific tax and fiscal bail outs based solely on which industry has the best lobbyists is just uncontrollable. It’s time to have a lower flat tax rate with very few deductions (based on GAP accounting, not legislative gibberish) and let companies succeed or fail based on their performance. Not only would this be simpler and less costly (my apologies to all the soon to be unemployed tax accountants and lawyers) but this would allow businesses to plan long term in a stable tax environment.

Don’t be confused by the words spoken at the hearings today, this is simply political theater of the round and an embarrassment to the concept of free enterprise. Yes these CEO’s are coming as an extension of their lobbying efforts to continue to get a bail out for their industry. The Leftist will vilify the corporations over their profits (god forbid anyone makes profits) and talk about the pain of consumers paying gas prices of more than $4 a gallon. Republicans will forget their free market roots and defend the ongoing bail out an industry with combined profits of more than three times the total tax break. All throughout the klieg lights will flash and CNN, Fox News MSDNC and CNBC will provide live coverage of the drama of pre written statements being read. As I said, theater of the round.

All the while maybe the most strategic question to the United States in the next decades will be totally ignored, sustainable energy self sufficiency for America. The politics of this subject have been so blurred than it is dizzying. I am proudly conservative and as such believe in self sufficiency and self reliance, of the individual and the nation. Being conservative does not mean being pro any industry nor does it mean being anti environment. America should be aggressively pursuing clean renewable energy sources. We should be developing domestic oil, gas and coal. We should be developing next generation nuclear energy sources. There is no single solution to our energy problems but there is a common enemy. By allowing our reliance on foreign energy to continue we are continuing our dependence on people who don’t like us. I would rather see solar cells on the roof of every home in my town than continue sending almost a TRILLION DOLLARS a year to Hugo Chaves in Venezuela and to the Saudis’ to pay for Madrasa schools to teach your Arabs to hate us. Really, it’s time to wake up and stop this Washington theater and let loose the ingenuity of the American entrepreneur and private sector and develop the technologies which will allow us to be totally energy self sufficient.

Those of us on the right must step back and think what it really is to be a conservative. I opposed the General Motors bail out since it prevented a poorly run corporation from failing. If the oil and gas industry cannot make money from producing oil and gas inside the largest energy consuming market in the world, welcome to Chapter 11. Pass a flat corporate tax which is based on sound accounting, fair and predictable. Government should limit itself to preventing illegal market abuse, there is nothing Conservative about price fixing and anti competitive practices if they really occur. As for the Senate Finance Committee, I think they have a deficit problem to deal with.

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1 Comment

Filed under American Leadership, Budget, Congress, Conservative, Energy, Free Markets, Liberals, National Debt, Politics, Spending, Taxes

One response to “The Question of Tax Breaks for the Oil and Gas Industry

  1. Hello! This is my first comment here so I just wanted to give a quick shout out and say I really enjoy reading through your articles. Can you recommend any other blogs/websites/forums that deal with the same topics? Many thanks!

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