energy taxes Archives - Shopfloor

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

By | Taxation | No Comments

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.

Dealing with the Sequester 2.0: How to Make a Bad Situation Worse

By | Energy, Taxation | One Comment

Manufacturers are very concerned about the impact on the economy and jobs of the across-the board cuts in federal spending now set to kick-in on March 1st. But replacing these job-killing cuts with job-killing tax increases on the energy industry, as suggested by the White House and Senate Majority Leader Harry Reid (D-NV), is not an acceptable solution to the problem.

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 result in higher energy costs for manufacturers, driving up the cost of domestic production. And it doesn’t stop there. Raising taxes on domestic energy producing companies will make it more expensive to produce everything in this country. Increased fuel costs will affect all Americans, both manufacturers and consumers, by increasing the cost of products made and the cost of products purchased. As with the sequester, jobs will be lost.

Millions of current jobs will be at risk and future job creation thwarted if new energy taxes were enacted. Given our nation’s persistent, high unemployment rate and anemic economic growth, both the sequester and new energy taxes are bad ideas. It’s time to find new ideas to jumpstart our economy and stop trying to pick winners and losers based on a partisan agenda.

The Key to Energy Security Is Developing New Sources, Not New Taxes

By | Energy, Taxation | No Comments

Energy is an important issue for American manufacturers—we consume one-third of our nation’s energy, both as fuel and as a feedstock and NAM has been in the forefront of encouraging the development of new and affordable sources of energy. It’s an important issue for American families, too who share our interest in dependable—and affordable—energy sources. 

So we’re concerned about proposals to raise taxes on the energy industry that will take us even further from our goal.  Quite simply, increased taxes for energy companies will increase the costs of fuel to American energy consumers and manufacturers. The debate over energy policy should not be about imposing new taxes or new costs on the U.S. energy industry.

There are those that seek to distract from our need to create more energy by demonizing the very industry that can provide it. This type of demagoguery isn’t right and it certainly isn’t productive. Rather, the debate should focus on enhancing America’s energy security through increased production of all types of energy, improved conservation and energy efficiency, more research on technology and alternative energy, increased access to domestic sources with continued environmental protections, and improved distribution.

Higher Taxes on Energy Companies = Higher Energy Costs

By | Taxation | No Comments

Manufacturers were disappointed to hear the President, once again, call for increased taxes on energy companies during his speech today in North Carolina. Despite growing anxiety in recent weeks about the increasing cost of gasoline and predictions of $5 a gallon gas, the Administration continues to push for punitive tax increases on the oil and gas industry.

The increased costs actually would make a bad situation worse by discouraging oil and gas investments in the United States, increasing energy costs and making us less competitive and threatening job creation and the broader economy. The NAM has long held that the debate about energy policy should focus on enhancing America’s energy security by encouraging new investments in affordable sources of energy, not with new and higher taxes.

President Calls for More Energy Taxes…Again

By | Economy, Energy | No Comments

President Obama renewed his call on Congress to raise taxes on oil and gas companies today during a press conference at the White House.  The President didn’t break any new ground with regard to policy this morning, but his comments do provide another opportunity to make the point: Don’t make energy more expensive!

Manufacturers depend on affordable energy to make products Americans and consumers around the world depend on and use every day.  Higher energy prices have a direct impact on every American–chances are some kind of fuel was used either to make or transport virtually everything we touch.

Now is the wrong time to raise energy taxes.  It will hurt job creation and further burden manufacturers, which are already strained by rising raw material costs and costly regulations, to give two examples.

Senate Set to Vote Tonight on Energy Tax Increases

By | Energy, Taxation | No Comments

Tonight, Senate Majority Leader Reid is planning a “test” vote, to gauge the support for on increasing taxes by 20 billion dollars on major oil companies in the United States. While the odds are against get the support of 60 Senators to move forward on this legislation, this is political theater, pure and simple. The purpose of the vote is to demonize successful companies that are working hard every day to increase domestic energy production to help reduce our dependence on foreign oil.

The Senators pushing S. 940 know that increasing taxes on oil companies will not lower gas prices. In fact, members on both sides of the aisle have already acknowledged this. This is simply another ruse for Senator Reid to continue his tax and spend policies that have failed, time and again. And the suggestion that any increased revenue from raising taxes has absolutely no merit and is simply laughable!

This legislation would impose punitive and discriminatory taxes on specific companies within one industry. Congress should not be in the business of picking winners and losers. Who is next, could it be your company – what is your profit margin? If Congress decides to step on this slippery slope, any business should be worried that they will be punished with excessive and targeted taxation as a result of their success.

Unfortunately, the Senate leadership has taken their eye off the ball and decided to focus their energy on impeding job growth and discouraging future investment, when they should be working alongside energy companies that are seeking to produce new domestic energy to reduce our dependence on foreign oil.

The end result of this legislation would be to punish those who have succeeded in the free market and an increase in the cost of energy. This would increase in the cost of doing business, affecting the global competitiveness of manufacturers, and their ability to create jobs. This will ultimately hurt the consumer. S. 940 will only stifle any potential economic growth, which is yet another slippery slope as our nation is in the midst of crawling out of a serious recession.

Dorothy Coleman is vice president for tax and domestic economic policy. National Association of Manufacturers.

Manufacturers Key Vote’ Letter Opposes Energy Tax Increase

By | Energy, Taxation | No Comments

The National Association of Manufacturers today sent a “Key Vote” letter to the U.S. Senate expressing opposition to S. 940, the tendentiously entitled Close Big Oil Tax Loopholes Act. A vote on cloture is expected at 6:15 p.m. this evening.

From the letter:

S. 940 would impose more than $20 B in discriminatory taxes on the oil and gas industry under the guise of “eliminating subsidies.” In particular, the bill would increase taxes on the income from U.S. oil and natural gas production, refining and processing and discourage new oil and gas investments in the United States by making domestic energy investments less competitive economically with foreign opportunities. The bill also would guarantee that income from certain overseas investments by U.S. energy companies would face double taxation, reducing the ability of U.S. energy companies to compete for global natural resources that are critical to U.S. energy security.

Manufacturers consume one-third of our nation’s energy and the NAM has long supported the development of new and affordable sources of energy. Increased taxes for energy companies will increase the costs of fuel to American manufacturers and other energy consumers. The debate over energy policy should not be about imposing new taxes or new costs on the U.S. energy industry. Rather, the debate should focus on enhancing America’s energy security through increased production of all types of energy, improved conservation and energy efficiency, more research on technology and alternative energy, increased access to domestic sources with continued environmental protections, and improved distribution.

NAM Key Votes are determined by an advisory committee of NAM member companies, both large and small. The votes are used to rate a member of Congress’ record on manufacturing-related issues.

What’s the Logic: By Raising Taxes on Employers, We’ll Create Jobs?

By | Energy, Taxation | No Comments

A round-up of coverage and commentary on the Obama Administration’s budget proposal for Fiscal Year 2012…

Aric Newhouse, senior vice president, National Association of Manufacturers, NAM statement:

Unfortunately, President Obama’s budget plan … contains higher taxes for virtually all manufacturers – a direct threat to growth and manufacturing jobs. Increased income taxes on companies with worldwide operations, increased energy taxes and income taxes for small and medium-sized companies will make manufacturers less competitive.

Jack Gerard, president, American Petroleum Institute, “Administration tax hike will hurt jobs, cut government revenue“:

It’s no surprise the administration is proposing yet again to raise taxes on the U.S. oil and natural gas industry.  But it’s still a bad idea and comes at one of the worst times in our economic history.  The administration continues to ignore the fact this industry is among the nation’s largest job creators and delivers enormous revenues to government at all levels.  The industry pays income taxes, royalties and other fees totaling nearly $100 million every day and pays income tax at an effective rate far higher than most other industries.

 Besides eliminating thousands of new potential jobs, the increases, over the long term, would actually lower revenue to the government by many billions of dollars as a result of foregone revenues from projects the tax hikes would prevent going forward.

Dean Zerbe, Forbes, Capital Tax blog, “Obama’s Budget Proposal and Taxes: Lots of Regifting“:

The tax proposals in the administration’s FY 2012 budget released today is a combination of regifting (lots of old and cold proposals that didn’t go anywhere even when the Democrats ran the whole show) and some new proposals that will take a good deal of energy to get moving in this Congress. Read More

Reject Higher Energy Taxes to Support Manufacturing Jobs

By | Economy, Energy, General, Taxation | No Comments

The National Association of Manufacturers has a full-page ad in today’s Roll Call, building on our Manufacturing Means Jobs! campaign. Excerpt: 

Congress has returned to Washington declaring “jobs” to be a priority, even as some members promote the very opposite – the anti-jobs agenda of higher energy taxes.

The proposed energy tax increases would drag down the economic recovery, hurt manufacturers and small business, and force consumers to pay more to fill up their cars and heat their homes.