President Responds to the Inaudible Cries for Higher Gasoline Prices
It appears the President studied economics with his textbook upside down.
He proposes to raise taxes on oil companies in order to combat high gasoline prices. Or not. Maybe his textbook was right side up and he thinks gasoline prices are too low. That would be consistent with statements by his Secretary of Energy, Steven Chu.
On Thursday, the President reiterated his call for higher taxes on oil companies. The President pretends increasing taxes is just removing oil industry subsidies. They are tax increases.
For instance, the unfair tax break that makes up nearly half of what Obama calls “subsidies” is the manufacturing tax credit. All manufacturers except the oil and gas industry get to deduct 9 percent of their revenues before calculating their tax bills. (It’s worth noting that “manufacturing” is so broadly defined that it includes newspapers and software companies in addition to producers of wind turbines and solar panels.) Though oil and gas producers get the deduction, they are singled out for a lower 6 percent deduction.
Let’s review that. The oil and gas industry gets a deduction that is only two-thirds as generous as for all other manufacturers (wind turbine and solar panel manufacturers and even The New York Times, for example), yet the deduction is called a subsidy to oil and gas. The President’s proposal does not eliminate the deduction for any other industry. So back to the tax-increase story…