Energy Tax Policy Should Support an “All of the Above” Strategy

By February 4, 2014Taxation

Last Friday, the NAM submitted comments on Senate Finance Committee Chairman Baucus’ Energy Tax Reform discussion draft. Since manufacturing accounts for nearly one-third of the energy consumed in the U.S., Manufacturers could not let this draft go by without a strong statement that any tax reform plan must allow our nation’s energy producers to make the necessary investments to ensure our country’s energy security and that reform should not increase the tax burden on this vitally important industry sector.

Echoing our cost recovery comments this submission emphasizes the need for policies that support capital investments – such as those that are regularly required to produce energy – and that those policies must support all types of energy production. This is even more important today as thanks in large part to the investments and developments in shale gas production, the abundance of increased low cost energy and raw material is producing a competitive advantage today for many manufacturers and other energy consumers. Tax policy must reflect the fact that finding and producing domestic oil and natural gas are requires large and ongoing capital investments. Current policies that allow, for instance, intangible drilling costs (IDCs) to be deductible as ordinary business expenses are the types of policies that will continue to allow companies to make the investments necessary to develop these resources.

Further, because as we support incentivizing investment, we also oppose policies such as a carbon tax that seek to penalize production. Such a punitive tax would impair the ability of U.S.-based producers to compete in a global marketplace, would increase energy prices and would have a negative impact on economic growth. This was a key finding of a study, “Economic Outcomes of a U.S. Carbon Tax” undertaken for the NAM last year by NERA Economic consulting.

The NAM is a strong champion of domestic energy production as well as efforts to promote energy efficiency and develop renewable sources of energy, and has long pointed to the important role a favorable tax climate plays in achieving these goals. As we look towards comprehensive tax reform the ultimate goal should be the creation of a tax code that is pro-job, pro-growth and pro-competitiveness and policies that support the development and investment of energy resources will help us attain that goal.

Carolyn Lee

Carolyn Lee

Executive Director of The Manufacturing Institute at The Manufacturing Institute
Carolyn Lee is Executive Director of The Manufacturing Institute, the non-profit affiliate of the National Association of Manufacturers (NAM), the nation’s largest industrial trade association. Carolyn drives an agenda focused on improving the manufacturing industry through its three centers: the Center for the American Workforce, the Center for Manufacturing Research, and the Center for Best Practices.

In her role, Carolyn leads the Institute’s workforce efforts to close the skills gap and inspire all Americans to enter the U.S. manufacturing workforce, focusing on women, youth, and veterans. Carolyn steers the Institute’s initiatives and programs to educate the public on manufacturing careers, improve the quality of manufacturing education, engage, develop and retain key members of the workforce, and identify and document best practices. In addition, Carolyn drives the agenda for the Center for Manufacturing Research, which partners with leading consulting firms in the country. The Institute studies the critical issues facing manufacturing and then applies that research to develop and identify solutions that are implemented by companies, schools, governments, and organizations across the country.

Prior to joining the Institute, Carolyn was Senior Director of Tax Policy at the NAM beginning in 2011, where she was responsible for key portions of the NAM’s tax portfolio representing the manufacturing community on Capitol Hill and in the business community and working closely with the NAM membership. She served as the Director of Legislative and Government Affairs at the Telecommunications Industry Association, Manager of State and Federal Government Affairs for 3M Company, and in various positions on Capitol Hill including as Legislative Director for former U.S. Senator Olympia Snowe (R-ME), and as a senior legislative staff member for former U.S. Rep. Sue Kelly (R-NY).

Carolyn is a graduate of Gettysburg College in Gettysburg, Pennsylvania graduating with a B.A. in Political Science. She resides in Northern Virginia with her husband and three children.
Carolyn Lee

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