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Ohio Rally for Jobs
Posted By:  - 09/02/10

Ohioans, listen up! Texas isn’t the only state rallying together to protest taxes on oil and natural gas – you can too!

Ohio Rally for Jobs will occur next Tuesday morning in Canton, OH. Speakers include Matt Patrick, 1100 WTAM Radio; David Wolters, Chair, Buckeye Energy Forum; Rebecca Heimlich, Ohio State Director, Americans for Prosperity; Mike Cary, President, Ohio Coal Association; Tom Stewart, Executive Vice President, Ohio Oil and Gas Association; Rhonda Reda, Ohio Oil and Gas Association; Karen Wright, CEO, Ariel Corporation; Tom Jackson, Ohio Grocers Association; Pam Hurley, Ohio Farmer; Dennis Barton, Army Veteran, Iraq; Deborah Owens, Political Science Professor, The University of Akron; and Seth Morgan, Ohio State Representative.

Join activists from your state and NTU members at Ohio’s Rally for Jobs to send a message back to Washington: NO to higher taxes that will increase unemployment and shove our economy into the ditch.

Who: Thousands of energy activists and NTU members

What: Rally for Jobs

When: September 7, 2010 – Doors open at 11:00am

Where: Canton, OH – Canton Memorial Civic Center (1101 Market Avenue North, Canton, OH 44702)

We’ll see you there!

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Texas Rally for Jobs
Posted By:  - 08/31/10

Attention Texans!

America still has 15 million people out of work and the Obama Administration and Congress are debating legislation that will cost us even more jobs! That’s why we’re inviting you to a Rally for Jobs tomorrow, September 1 to protest efforts to hike taxes on oil and natural gas and to extend the Administration’s crippling moratorium on offshore energy exploration.

WE NEED YOUR HELP. Nothing beats the power of grassroots activism and it is up to you to speak up and let your voice be heard. Attendance is absolutely free – come on out and learn what you can do to stop these harmful proposals. Join activists from your community and NTU members at the Rally for Jobs to send a message back to Washington: NO to higher taxes that will increase unemployment and shove our economy into the ditch!

Rallies will occur in Houston, Port Arthur and Corpus Christi, so choose the city nearest you. Doors open at 10:30am at each of the following locations:

Houston: George R. Brown Convention Center (1001 Avenida de las Americas, Houston, TX 77010)

Port Arthur: Port Arthur Civic Center (3401 Cultural Center Drive, Port Arthur, TX  77642)

Corpus Christi: American Bank Center Convention Center - Henry Garrett Ballroom (1901 North Shoreline Boulevard, Corpus Christi, TX 78401)

Only efforts made by taxpayers like you will help turn the tide against their harmful plan. We need your help to fight these tax hikes on the oil and natural gas that fuels our economy! Our economic future depends on it.

We hope to see you tomorrow at Texas Rally for Jobs!

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Subsidizing Inaccuracy
Posted By: Pete Sepp - 08/19/10

In a supreme twist of irony, Congress's own Joint Committee on Taxation (JCT) adds further support to the suspicion that The New York Times and its ideological minions have recently been playing fast and loose with oil industry tax numbers.  What's the irony? Using one of the tax-and-spenders' favorite methodologies, a report from JCT published several months ago had already proved them wrong.

In a story earlier this summer, Institute for Liberty refuted claims made in a New York Times article that the American energy industry was dodging taxes through loopholes and energy credits.  As just about everyone outside of far-left circles understands, American businesses of all kinds, including energy companies, normally pay plenty in taxes. 

But the Times and its acolytes could have saved themselves a lot of trouble by reading the JCT report first. Entitled "Estimates of Federal Tax Expenditures for Fiscal Years 2009-2013," the document identifies "reductions in income tax liabilities that result from special tax provisions

or regulations that provide tax benefits to particular taxpayers." This approach needs to be taken with more than a grain of salt. Some of the largest "tax expenditures" identified in the report include the mortgage interest deduction and tax deferral on 401 (k) contributions. In these cases, the "particular taxpayers" who "benefit" number in the tens of millions.

Do each and every one of these provisions constitute good policy? Certainly not. But unless Congress is willing to consider getting rid of the whole system and replacing it with a simplified flat tax or Fair Tax arrangement, repealing any of them raises someone's tax burden. Moreover, deciding not to tax a certain activity isn't a government "expenditure" – unless we believe that government has first dibs on every single penny in our pockets.

Nonetheless, let's grant the big-government crowd their contention for a moment. As the graphic below, using JCT data, clearly illustrates, the firms most representative of so-called "big oil" receive only a fraction of the amount in energy-specific "tax expenditures" as compared to the renewables sector. Renewables are projected to receive an average of $12.5 billion in "tax expenditures" each year between FY 2009 and FY 2013, while major companies in the demonized American oil and gas industry are slated for less than a billion dollars.

Probably not the results those tax-and-spenders were expecting.

subsidy

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Taxing American Energy Production
Posted By:  - 08/06/10

Last night, Senator Bill Nelson unveiled an amendment to H.R. 5297, the House-passed small business bill, that would impose harsh new taxes on American energy production by repealing the Section 199 domestic manufacturing deduction for major oil companies. This amendment comes in response to the Republican amendment, offered by Senator Mike Johanns (R-NE), to permanently repeal Section 1099 modifications in the new health care law. I know this can be confusing, so let me break it down for you:

Obamacare contains a provision that requires companies to submit 1099 forms for goods or services purchased from a vendor for $600 or more. This would entail extremely burdensome regulations on businesses at a time when many are struggling amidst the dismal economic climate. Both Republicans and Democrats have expressed concern over these reporting requirements, but their approaches vary greatly. The Johanns Amendment would repeal Section 1099 modifications altogether, but the Nelson Amendment would simply scale them back by exempting businesses with 25 or fewer employees and raising the payment threshold from $600 to $5,000. What's most troubling about Senator Nelson's amendment, however, is the pay-for: it would repeal Section 199 that allows integrated oil companies to deduct six percent of their income. We sent a letter to selected Senate offices this afternoon (in advance of a Senate-wide communication effort) to highlight the potential devastating effects of such a tax hike. Here's a sample paragraph from the letter:

The amendment "would be 'paid for' by completely eliminating the 199 deduction in the tax code, resulting in a significant and discriminatory levy on oil and gas companies. Increased costs would inevitably be passed down to consumers in the form of higher gas prices and electricity bills, and could also endanger many jobs connected with or supported by the industry. In addition, this punitive tax policy could further hinder our ability to bounce back from the current financial crisis – a liability our nation simply cannot afford."

The Senate will take up the Nelson Amendment when they reconvene in September. We urge a NO vote and will keep all of you apprised of any developments this next month.

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$7 Gas? No Thank You!
Posted By:  - 06/18/10

I've come to really appreciate and look forward to the Heritage Foundation's "Foundry" posts each day. They're interesting, informative, and, more importantly, in tune to current events long before they could even be considered as such.

This morning's piece was no exception. The author, Ben Lieberman, wrote on President Obama's response to the oil spill and mission to "repackage" energy climate legislation. You may recall that the House voted on its version of cap-and-trade last summer. NTU fought ferociously to defeat the tax-hiking, job-killing bill that ultimately stalled in the Senate. Why have members dragged their feet, you ask? Because the power of public opinion is often underestimated, and Congressional leaders are never likely to bring up such a contentious issue (just as unpopular as Obamacare) in an election year...that is, until the oil spill occurred. Now the Administration thinks they have a legitimate opportunity to move forward with their climate change agenda. Disguise it as an oil spill "relief" package! That's right, we're on to you.

According to Heritage, we could see an energy tax so high that it dramatically reduces demand for gas and electricity because we might not be able to afford them! In today's Foundry, Lieberman cites a Harvard University study that estimates the price of gas could rise to as high as $7-a-gallon:

"Now the president is repackaging cap-and-trade - again - as a long-term solution to the oil spill. But it's the same old agenda, a huge energy tax that will raise the cost of gasoline and electricity high enough so that we're forced to use less."

"The logic linking cap-and-trade to the spill in the Gulf should frighten anyone who owns a car or truck. Such measures force up the price at the pump - Harvard Kennedy School's Belfer Center for Science and International Affairs thinks it 'may require gas prices greater than $7 a gallon by 2020' to meet Obama's stated goal of reducing emissions 14 percent from the transportation sector."

And while Obama claims less demand will simultaneously diminish the need for drilling, Heritage points out that energy will continue to be a "vital part of America's energy mix." Congress needs to explore and implement practical solutions, not a cap-and-trade bill that will kick our friends on the Gulf Coast while they're already down.

We couldn't afford $4 gas. $7 is simply unimaginable.

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NTU comes out against tax hikes in Pennsylvania
Posted By:  - 06/09/10

Today, NTU sent a letter to the Pennsylvania State Legislature, urging them to reject tobacco and natural gas taxes. Instead, NTU urges legislators to look at budget and tax reform to solve the state's fiscal crisis. The relevant parts of the letter say:

"[A] tax increase on tobacco products is the last thing that Pennsylvanians need in the midst of a recession. History shows that tobacco taxes consistently fail to produce promise revenues. A proposed 30% tax increase on the retail price of cigars and smokeless tobacco products would harm small retailers, such as convenience stores along Interstate 81 and cigar shops in Bucks County, who will see sales diminish as consumers seek out less costly products in neighboring jurisdictions. Further, a tobacco tax would also impact small farmers in the Commonwealth, many of whom grow tobacco to supplement their income."

"Additionally, a severance tax on natural gas production would only increase energy costs for consumers and stifle gas production in the Commonwealth. Energy companies will pass the cost of the tax onto consumers in the form of higher utility bills. According to the Commonwealth Foundation, states with severance taxes, such as West Virginia, have not experienced as much growth in the energy sector, including job creation, as states without a severance tax. Many other states, such as Texas and Arkansas, have delayed or reduced their severance taxes to encourage more natural gas production. Given the recent opening of the Marcellus Shale area, Pennsylvania should use this opportunity to expand and invest in the state's energy sector, which would offer benefits to all Pennsylvanians through cheaper energy and more jobs, not higher taxation."

"Rather than raising taxes, the best way to solve Pennsylvania's budget problems and clear the path to prosperity is to trim government spending and reform taxes. Governor Rendell's proposed $29.3 billion budget is four percent higher than last year. This recession has forced Pennsylvanians to prioritize their expenses and then cut what they cannot afford. It is only reasonable for their government to do the same in crafting the next budget. Moreover, Pennsylvania has the eleventh-highest tax burden in the nation, which includes some of the worst corporate tax rates in the country. By reducing government spending and reforming taxes, Pennsylvania can address its budget deficit while also laying the groundwork for economic growth."

Let's hope that the Pennsylvania legislature takes this advice to heart as they work towards crafting a budget. 

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Ethanol Still Looking for Help
Posted By:  - 06/02/10

American ethanol producers are now exporting ethanol to Abu Dhabi, off all places.  Yet, with 80 million gallons exported in the first quarter of this year to countries around the globe, the ethanol industry is still looking to taxpayers for continued support.  Matt Hartwig of the Renewable Fuels Association tells the Lincoln Journal Star, "Let's create a market here, so we can use every drop of ethanol we can produce."  As production has increased, the industry has lobbied the EPA to increase the amount of ethanol in gasoline from 10% to 12 or 15% to absorb the industry's overproduction.  If ethanol hasn't been able to create a market here after decades of generous taxpayer subsidies, artificially-created markets, and tariffs that keep out foreign ethanol, one has to wonder when ethanol is finally going to take off in the marketplace.

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Oil Spill Could Fuel Anti-Pollution Tax
Posted By:  - 06/01/10

The Gulf of Mexico oil disaster has prompted more planning by lawmakers in Washington State to increase taxes on oil companies to pay for preventing oil spills and toxic runoff in the state's waters.  The proposed tax would make up for a 43 percent funding decline in Washington's oil spill prevention program since 2006.  The House Ecology and Parks Committee discussed a tax on oil companies and possible regulatory changes.  It is likely that some form of the proposed tax will be introduced, although a similar proposal died earlier this year after intense lobbying by the oil industry. 

House Bill 3181 was considered last year to boost spill response and curb storm-water pollution.  The bill would have more than doubled a tax on hazardous substances and added about $100 million to the $250 million in storm-water funding already raised by cities throughout the state.  Now that the oil industry may have less traction with legislators and voters, it is likely that these companies will soon be paying additional taxes on top of what they're already paying. 

It appears legislators are using the oil disaster to hit taxpayers once more. 

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Wind More Pork Than Power
Posted By: Dan Barrett - 05/06/10

Cape Cod looks to have a change in scenery in the coming years as 130 wind turbines will soon be visible on the horizon of such historic areas as Nantucket Sound and Martha's Vineyard. But instead of calling the project a boon for environmental "green energy," it looks as though it's a bust in environmental, industrial, and economic spheres.

Environmentally, wind energy creates little to no carbon emissions but the manufacturing process most certainly does. The metals, plastics, and transportation of the massive fans are created in a petroleum-rich system. Much like ethanol, the efforts put into the process offset the gains in the clean energy. The FAA has also raised safety questions because the turning blades interfere with aviation radar instruments. Underlying the entire change to wind power are the displaced workers of more traditional industries.

Taxpayers have grounds to be concerned because the costs won't be recovered, as the power generated will likely not meet regional power demands (unless the government sees fit to ration it as it will with healthcare). A New York Times article projects a $1 billion cost by supporters (real numbers have been kept confidential), with up to $10 billion likely spent on grid and transmission upgrades as greater energy storage capacity will be required because winds are not constant or wholly predictable. When in place, the system COULD produce up to 75% of Cape Cod power needs. With a year-round population of only 230,000 people, it looks as though a lot of money will go towards status quo results and remains to be if it will be financially self-sufficient.

After some research, I found the project is really projected to cost closer to $2.2 billion overall and that subsides will cost the American people roughly half that price tag, according to Beacon Hill Institute Senior Economist Jonathan Haughton. The handout comes in forms of both the federal and Massachusetts tax credits and subsidies, all totaling almost $1.1 billion.

Some energy sources don't require government money to startup or remain in business. However if the government subsidy didn't exist, the wind turbines wouldn't be built. The plan to clean up energy production is a noble venture but not one to sacrifice American economic longevity. With about 42% of the entire new 2008 power-producing capacity added in the US being wind, totalling $17 billion in that same year, we must ask who will benefit and who will be left picking up the tab.

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