How Should Government Treat Energy Producers?

[david white]

http://paul.house.gov/index.php?option=com_content&view=article&id=1883:how-
should-government-treat-energy-producers&catid=62:texas-straight-talk&Itemid=69

How Should Government Treat Energy Producers?

As the economy continues in its downward spiral and talks in Congress about reducing
spending have only amounted to political theater, the subject of how the tax code treats
energy has become a topic of controversy. Specifically, should we subsidize, enforce
mandates, or give tax credits and deductions to industries like ethanol and natural gas?
Having a thriving energy market domestically is a good thing and something the
government should not hinder. Not only would decreasing our dependence on foreign
oil simplify our foreign policy, but it would greatly enhance our anemic economy at
home.

Of course, the government should neither inhibit nor subsidize any particular type of
energy. While many people agree with that statement, there is much confusion over the
difference between government subsidies and tax credits or deductions. The difference
is night and day, yet so many times they are all lumped together as evil government
handouts. A subsidy IS a government handout. It amounts to the government taking
money from the people and giving it to a favored interest. It is the worst sort of market
manipulation and it is something I can never support. This kind of government mischief
is anathema to the Constitution and the principles of freedom and the free market.

By contrast, with tax credits and deductions, industries, business, and individuals simply
get to keep more of the money they have earned. Ideally, the tax code should not be
used for social engineering, but, until we have true tax reform, I will always support tax
credits and deductions that keep more dollars in the private sector where they are spent,
saved, or invested. This means I will support tax credits and deductions for energy
producers, farmers, homeschoolers, family child care expenditures, expenses of
evacuees from disaster areas, and even adoption expenses. I've almost never met a tax
cut, deduction, or credit I didn't like. Any measure that keeps money in the private
sector to spend, save or invest, rather than allowing the government to waste or
misallocate is a win for the economy.

Inequities in the tax code dealing with tax credits should be solved by giving all
participants equal treatment. Removing

I oppose ethanol mandates because I do not think anyone should be forced to use or
buy ethanol. Ethanol mandates often serve as corporate welfare for big agriculture
ethanol producers. The marketplace should decide whether or not to use ethanol, and
producers of ethanol have to discover if they can produce it at a price that makes good
business sense. No industry should be allowed to use legislation to create a "market" for
its products. The real reason ethanol mandates continue to surface in federal legislation
is that agribusiness continues to have one of the most powerful lobbies in Washington.

Furthermore, while I do not support providing federal grants to any industry, I do
support the tax credits contained in the NAT Gas Act, HR 1380. These credits reduce
taxes for the production or purchase of vehicles that run on American-made natural gas.
These credits are not subsidies. Of course, we should repeal federal barriers to energy
production and reduce taxes on all forms of energy. Therefore, I have also introduced
the Affordable Gas Price Act HR 1102 which would remove governmental barriers to
offshore drilling, encourage private investment in new refineries and suspend taxes on
gasoline when the price at the pump reaches a certain threshold. Lowering taxes to
encourage the domestic production of energy and getting government out of the way of
the American energy market is not a government giveaway; it is the way it should be in a
free country.