Like a delusional fast food customer who orders a triple bacon
cheeseburger and smugly asks for a “diet” soda, Obama
administration policies that aim to promote economic health
actually threaten economic ruin for the country.
Consider the president’s insistence on cutting so-called
“subsidies” for the oil and natural gas industry. The president
pledges to eliminate Section 199 of the Tax Code — but for oil
companies only. The section 199 manufacturer’s deduction has been
a
central focus in trips to Iowa, Wisconsin,
and other states where he touts it as a jobs creating measure. So,
is the deduction not creating oil and natural gas industry jobs? Is
the president right in wanting to eliminate it for the U.S. oil and
natural gas industry? According to new research, the answer is a
resounding no.
A
recent analysis by the World Economic Forum
indicated that oil and natural gas companies, though targeted for
punitive elimination of the manufacturer’s deduction, created 9
percent of all new U.S. jobs in 2011. Those included 37,000 new,
direct jobs, and 111,000 indirect jobs in related service fields
and contracting positions. This total of nearly 150,000 employment
opportunities does not include, as most such studies do, another
set of jobs for store clerks and others who are hired because of
the influx of new oil industry jobs. In a year when the president
is scrambling to defend his policies (to get re-elected in an
“Economy Election”) his rancor against an industry creating so many
jobs seems reckless, or worse.
Further, another
study, by economist and University of
Pennsylvania Wharton Senior Fellow Dr. Joseph Mason, uses
government modeling to find the economic impact if the selected tax
deductions for oil and natural gas companies are eliminated. The
results aren’t pretty: 155,000 lost jobs and over $340 billion in
unrealized economic output. The tax barrage on these U.S. companies
highlights this administration’s fundamental misunderstanding of
the way the economy grows.
As former Congressman Harold Ford Jr. (D-TN) recently
pointed out on MSNBC’s “Morning Joe” program, Americans get excited
about cutting edge companies like Apple, but “ExxonMobil’s a great
U.S. company, as well, and we seem very shy to talk
about.”
In fact, the country’s big corporations — including oil
and natural gas companies — are a major driver of the economy;
fueling every home and industry, creating jobs, innovating
profusely and providing a large proportion of U.S. tax revenues.
Moreover the federal Energy Information Administration (EIA)
reports that the oil industry paid $35.7 billion in corporate
income taxes in 2009, the last year for which the government has
released that data. Large corporations like ExxonMobil, GE, Ford,
or any other company that employs 5,000 or more typically account
for 70 percent of U.S. exports. Ironically, one of the president’s
major goals for economic revival has been to increase exports,
something targeted tax increases would stymie. These same companies
are responsible for 69 percent of private sector research and
development spending, the investment which makes U.S. products and
services a must-have for people around the globe. And they employ
32 percent of the workforce. But Washington “experts” don’t
appreciate the impact of these major economic players.
From the disastrous passage and implementation of
“Obamacare” to the refusal to reduce the corporate tax rate to a
reasonable 25 percent, Washington has let down the unemployed and
underemployed across the nation. Imposing higher financial demands
on businesses leaves them less competitive against their
international rivals, with less revenue to invest in growth
opportunities, to expand operations, and, ultimately, to hire new
employees. When these companies are succeeding, Americans find
employment, earn money, and spend it to reinvigorate our
economy.
On the other hand, obtuse policy decisions that hamper
large businesses with higher federal costs push jobs overseas or
eliminate them altogether. Such “leadership” is as self-delusional
(but more dangerous for the country) as buying a diet soda to go
with your triple bacon cheeseburger.
