|America's independent, non-partisan advocate for overburdened taxpayers.||Home | Donate | RSS | Log in|
August 19, 2010
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.
Comment on this blog