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Taxpayers Need Government out of the Gas Tank


Pete Sepp
February 13, 2013

Despite big talk on jobs and the deficit, for individual taxpayers working hard to get by in a struggling economy with persistently high unemployment, the President’s State of the Union (SOTU) address tonight provided contrasts and contradictions. Those who filled up their gas tank on the way home from work were surely shocked to see the price of gas has surged to a national average of $3.60 according to the latest numbers from AAA, up about 30 cents over the past month. If you were to ask most commuters if this is what recovery should look like the reply would most certainly be “No.”

When the price of energy directly affects our daily lives and the entire economy, paying top-dollar for fuel means fewer funds for other necessities. Furthermore, the resulting rise in transportation, heating, and food costs, are just a few consequences that increase the costs of doing business and drag down American families .

The President’s speech touted the progress made in expanding oil and natural gas production under his tenure, even though in other forums the Administration continues to attack so-called “tax loopholes” for traditional energy producers.  But the President is primarily taking aim at two provisions - the Section 199 deduction and dual capacity status -  that are widely available for many businesses. Eliminating these common practices, but only for oil and gas, - might please green energy advocates. In the long run, however, this takes our tax system away from the goals of simplicity and fairness. Proponents of higher energy taxes try to paint a picture of special treatment and back-room shenanigans in favor of “Big Oil,” conveniently neglecting to mention policies like the Renewable Fuels Standard (RFS) that exemplifies a systematic partiality toward the “green energy industry.”  Unfortunately, this misguided tactic of perpetual Washington meddling in the energy market comes at a very high price for not only taxpayers, but also livestock and dairy producers, food providers, and the environment.

Unleashing the power of the free market would give taxpayers instant relief and provide real stimulus to our economy. Reforming or repealing the RFS would open-up the commodities market and lower the cost of feed for the troubled livestock industry, bringing down record-high food prices for budget-conscious families. Taking such action would have fit with the President’s State of the Union theme of helping the middle class get ahead, but instead the EPA has refused to respond to pleas for relief from across the private sector. Additionally, lower corporate taxes across the board, rather than punitive tax code manipulation, would further control costs for consumers – providing needed jobs and economic relief. That way, when the day comes that all sources of energy can compete on a truly level playing field, taxpayers will have the funds and technology to make that choice for themselves by voting with their wallets. Based on what we heard tonight, that day may still be far off.


 

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