Most worrisome are the proposed changes to the U.S. tax code. Not only are they punitive measures aimed at one already volatile industry in a time of economic uncertainty, they won’t do a thing to lower the price of gas, increase energy production, ensure national security, or provide for economic stability. We’ve tried changing the tax code before and pretending that those steps represented a sound energy policy n we’ve failed every time. Why Congress continues to bang its head against this particular wall is beyond me.
The windfall tax proposed is a good example of a bad policy. We tried a windfall tax in 1980. It did little more than increase our reliance on foreign oil, while providing a fraction of the promised revenue. The current windfall tax is not any better. Though its aim of increasing funding available for alternative energy production is a good one, the punitive method it uses goes against sound economic principles.
This will be compounded by another proposed tax change concerning foreign tax credits. Essentially, the change would increase the tax burden on domestic companies, which will create an artificial competitive disadvantage and hamper their ability to compete overseas. Like the changes to the windfall tax and the domestic production tax, this will cause prices to rise and imports to increase.
And because domestic companies will no longer be able to afford to do business in foreign markets, we put more control of resources in the hands of foreign entities n some of which are not friendly to the United States. The bottom line is, decreasing our energy stature in the world market is a move away from protecting national security.
Instead of short-sighted tax-policy fixes, Congress should instead be looking to a comprehensive energy policy. That policy absolutely needs to have alternative energy as a major part of the mix. It also needs to encourage ongoing conservation efforts. But the only near-term component of that comprehensive policy that can alleviate the current high energy costs is to increase the supply of readily-available energy n the proposed punitive tax-code changes actually would work against that. The obvious solution to our energy problems is to increase the ability of American companies to produce more energy.
We have a supply problem, so we need a supply solution. It’s time for real solutions n solutions aimed at increasing supply. Isn’t it time Congress actually addressed the problem and worked toward solutions that go beyond politics?
Rep. Jon Sonju represents House District 7 in Kalispell. He is chairman of the House Transportation Committee.
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