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March 02, 2008
House Passes Wacko Energy Bill
by Tina Grazier
Nancy Pelosi and her buds in the House have just announced to the people of the United States that they don’t give a rip about American jobs, the price of gasoline, heating oil, and other goods, or private property rights. They have also told Americans that it’s just fine to give the dictator of a foreign country a tax break. If you want to know one of the biggest underlying reasons for a sluggish economy and rising prices you don’t have to look much further than democrats in control of government. The threat has just been made very real for Americans and the American oil industry.
HR 5321, which passed 236 to 182, will scrap a tax deduction given to major US oil companies for the exploration and production of energy. This will translate to an $18 billion increase in the cost of production. Before you start clapping those paddy-cakes with glee at the thought of sticking it to BIG OIL, try to remember that we will pay the price.
We'll pay at the pump, in our power bills each month, in the price of groceries and other goods, and in the loss of jobs. If democrats stay in control of Congress, take the presidency, and continue to punish American industry with bills like this one we will fall way behind in the global economy. But the burden this bill will inflict on Americans wasn’t enough for Speaker Pelosi. She decided to give Hugo Chavez a big advantage as well. As reported in Investor’s Business Daily:
“Under this bill, the dictator's oil subsidiary keeps its 6% deduction for U.S. domestic manufacturing — the one the American oil companies lose — because Citgo, technically, buys from Chavez.”
The IBD article, “Tax Breaks for Hugo?” also points out the following:
By taxing big oil companies, Congress gives them less cash to develop new sources of supply that would bring these prices down. America's large integrated oil companies are profitable, but they also are the biggest spenders on exploration and R&D technologies. They have the greatest capacity to reach into the earth's remotest regions to produce energy; now, they'll do less of that. ** Meanwhile, U.S. oil companies will have a long-term incentive to locate operations abroad, if only to match the advantage enjoyed by companies such as Citgo. When that happens, America will be more dependent than ever on the whims of foreign petro-tyrants like Chavez.
Exxon, Chevron, BP, Shell and ConocoPhillips last year had $6Billion in assets confiscated by Hugo Chavez…this bill rubs salt in that wound...it undermines whatever chance these companies have of being compensated for the investment they made in Venezuela. The good news is that the bill has little chance of becoming law, at least for now, because President Bush will not sign it. But it does give us an idea of what is in store for the American economy in the near future with democrats in control of deciding how to take and spend our hard-earned dollars.
Note of interest: According to the Tax Foundation, the "average effective tax rate" on oil companies is nearly 39%, compared to 33% for other industries. – reported by Steve Forbes
Posted by Post Scripts at March 2, 2008 12:02 AM
Comments
National security = oil
Posted by: Whoofer at March 2, 2008 05:37 AM
Yep Whoofer...there's that too. Whether we like it or don't.
Posted by: Tina at March 2, 2008 11:55 AM