According to Politico, Democrats in Washington DC are looking to “strip the oil industry” of “tax breaks and financial incentives” to the tune of anywhere from $20 billion to $52.6 billion over ten years. But let’s be honest folks. This is a big, fat tax hike. And it won’t be the oil industry footing the bill, but rather the already beleaguered American economy.
It’s always interesting how these issues are cloaked in the rhetoric of class warfare. Oil companies are rich, you see. They make a lot of money, and they get “financial incentives” and “tax breaks.” And obviously that’s wrong. Because they make lots of money, you see.
Of course, oil companies do make a lot of money. But they do so by providing a product Americans want and need at prices they can afford. And they employ one heck of a lot of people along the way, from roughnecks in places like the North Dakota oil fields to pipeliners and truckers who bring the oil to market to clerks who ring up your fuel purchases.
Smacking the oil industry with big new taxes only ensures that the product the industry sells (oil) is more expensive for those who buy it (every single American). It also means that the oil industry will employ fewer people.
And though neither the Democrats nor their apologists in the media will use the term, ending “tax breaks and financial incentives” is a tax hike. They carry on as if not taxing the oil industry were some sort of a subsidy. Letting businesses keep the wealth they create is hardly subsidy. Refraining from taxation is hardly largess.
We can argue about equal treatment under the tax code, and there is some merit to that argument, but in this instance we’re talking about tax hikes simply because Democrats have decided that something isn’t being taxed enough. And despite the harmful economic impact these tax hikes would have, Democrats push ahead with them anyway because they’re desperate to staunch red ink bleeding from their budgets.
But the solution isn’t more taxes on the private sector, whatever specific industry we’re talking about, because it is literally impossible to our federal government to tax its way out of its debt and deficit problems. Even raising some taxes to 100% rates wouldn’t cut the mustard.
Rather than playing class warfare games with the oil industry, our political leaders should be debating a) what spending they’re going to cut and b) how much they’re going to cut it. Because spending cuts are the only solution to our problem.