There are many ideas swirling around Washington these days on how to avoid the fiscal cliff and address our nation’s long-term fiscal challenges. Some ideas are good, but many are “nonstarters” for manufacturers, particularly if they include higher taxes on the industry. One bad idea in particular is raising taxes on the energy industry. The manufacturing sector is the largest energy consumer in the United States, using one-third of the nation’s energy. Imposing new energy taxes will drive up domestic energy production costs for manufacturers. In fact, raising taxes on domestic energy–producing companies will make it more expensive to produce everything in this country. Higher fuel costs will affect all Americans by increasing the cost of products made and the cost of products purchased.

And that’s not all. Energy tax increases will cost jobs. Millions of jobs will be at risk and future job creation thwarted if new energy taxes are enacted. With a persistent unemployment rate hovering around 8 percent, imposing new energy taxes is a bad idea. In addition, manufacturers and the broader business community will bear the brunt of higher fuel costs driven by new energy taxes, causing a further drag on job creation.

Energy independence is also at stake. The United States has made great advances recently in developing new domestic energy sources. Unfortunately, levying higher taxes on energy companies would discourage U.S. oil and gas investments, working against the goal of enhancing America’s energy security and boosting new, domestic investments in affordable energy sources.

The National Association of Manufacturers is working hard to convince Washington’s policymakers not to go over the fiscal cliff and instead get our nation’s fiscal house in order. Our support for this goal, however, doesn’t include increasing taxes for an industry or the broader manufacturing sector—a move we believe would make a bad situation even worse.

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