Despite a poor forecast for economic recovery this year, the Senate may soon repeal tax provisions specifically designed to encourage domestic employment, while simultaneously hitting U.S. energy companies with new taxes that will place their overseas counterparts at a competitive advantage. In response to these proposals, NTU launched a new nationwide TV and radio ad campaign to educate taxpayers about the negative economic impacts of these proposed tax hikes.
The most significant of the new tax increases would eliminate the “dual capacity” tax credits currently enjoyed by all U.S. companies – but only for the oil and gas industry. In addition to costing jobs, this selective double tax will work to the benefit of state-owned energy companies in places like Venezuela, China and Russia. And further confounding logic, these tax increases could actually erode the $160 billion in annual tax revenues the industry already provides to government coffers, as the position of U.S. companies abroad is financially weakened.
Unfortunately, this outrageous double tax for American energy isn’t the end of Washington’s whack-a-mole game. In a supreme twist of irony, the Senate is scheduled to vote on a proposal September 14th that would attach additional job-killing energy taxes to the “Small Business Jobs” bill. An amendment from Sen. Bill Nelson (D-FL) would eliminate the Section 199 manufacturers’ deduction, but again, only for the oil and gas industry. This deduction was put in place for the explicit purpose of domestic job creation; hardly ideal compared to reforming the whole monstrous corporate tax code, but moderately helpful in offsetting high rates.
The oil and gas sector employs or supports 9 million Americans and a trillion dollars of economic activity annually. Reliable, affordable energy supplies also reduce costs and instability across the economy as a whole. New taxes that reduce production and increase expenses ultimately fall on the backs of all consumers and businesses – not just the oil and gas industry.
If we let Congress get away with this, the predatory tax proposals will keep coming, and it will get tougher to extend all of the vital 2001 and 2003 tax relief laws. That’s why our ad campaign – and our grassroots mobilization effort – is going full throttle. We urge citizens to take action now!