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234 Economists Warn Congress: Current Energy Legislation Will Weaken Supplies, Worsen Tax Burdens
For Immediate Release October 17, 2007
Pete Sepp, (703) 683-5700
(Alexandria, VA) -- As House and Senate leaders announced that they were moving forward to resolve differences in energy bills that passed each chamber, 234 economists (including a Nobel Laureate) had a single message: More taxes, regulations, and subsidies will harm, not help, American energy policy. The non-partisan, 362,000-member National Taxpayers Union (NTU) organized the joint statement.
"We write to strongly advise against the inclusion of damaging anti-market provisions in the energy bills moving through Congress," the statement began. "History has shown that attempts by the federal government to tax, regulate, and subsidize our way to more plentiful and secure energy have failed miserably."
The House and Senate have enacted energy legislation with considerable differences between them. The House version proposes punitive tax treatment for oil, while the Senate bill would impose new automobile mileage standards. Both chambers propose heavy taxpayer backing for certain forms of energy such as ethanol and wind.
The 234 signatories of the open letter include economists from the academic and professional sectors. In addition to Nobel Laureate Edward C. Prescott of Arizona State University, distinguished individuals from institutions such as Harvard University, the University of Chicago, the University of Michigan, and the University of California, Los Angeles endorsed the statement. The signatories also included representatives of some of the most prestigious research institutions in the country, among them: the Brookings Institution, the Hoover Institution, and the Institute for Research on the Economics of Taxation.
Arguing that "Congress ... ought to reduce government interference in the markets that are capable of delivering innovative energy solutions to consumers," the economists contend that current energy legislation falls short because it "distribute[s] funding based on political concerns rather than sound science or economics." The statement asserts that provisions that would raise taxes on the oil industry, propose unwise mandates on alternative fuel usage, and subsidize so-called "alternative energy" would fail because "political forces cannot replicate the results of market forces."
The economists conclude their statement with practical advice: "By easing regulatory burdens, ending distortions that divert productive capacity, and allowing the price mechanism to do its job, Americans will have far more energy security at a lower cost than any package of taxes, regulations, and subsidies could ever hope to create."
NTU is a non-profit citizen organization founded in 1969 to work for lower taxes and smaller government at all levels. Note: The full text of the economists' letter and a list of signatories are available at www.ntu.org.