Thursday, September 16, 2010

2011 Budget - #2146 - Energy Tax Hikes Could Cripple Economy - Big Government

Tax hikes on the oil and gas industry being pursued by the Obama administration will have a crippling effect on the U.S. economy, says a new report by professor Joseph Mason of Louisiana State University. In the study published earlier this week, the economics professor found that President Obama’s proposal in the 2011 budget to repeal tax credits for oil and gas companies will trigger “extensive economic losses” over the next 10 years.  If enacted, the plan could reduce economic output by nearly $341 billion, slash more than 154,000 jobs in 2011 and cut wages by $68 billion. Each year the Obama tax policies are in place, the study says, they would also hemorrhage an additional 115,000 jobs, many of them in the unrelated fields of healthcare and manufacturing.  Obama’s budget proposal calls for rollbacks on two types of tax credits, one under Section 199 of the U.S. tax code, which grants companies the ability to write off 6 percent of their revenue from oil and gas production from their tax liability. This proposal was struck down in a 56-42 cloture vote in the Senate Tuesday.  The second tax credit in Obama’s crosshairs is known as the “dual capacity tax credit,” adopted 25 years ago, which prevents U.S. companies with foreign offices from paying taxes twice. Obama’s proposal would single out oil and gas firms, rolling back a policy that allows the firms a tax credit for the portion of a foreign levy. Mason found this proposal would put U.S. energy companies, many of whom already compete against foreign government-owned firms, “at a significant disadvantage against foreign competitors.”  Read more..........  This sounds as drastic of an impact as Cap and Trade on the economy, could be another end run around a Senate vote on Cap and Trade, as the public's attention is not focused on the 2011 Budget and Obama's budget proposals as stated above.

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