How Should Government Treat Energy Producers?
by Ron Paul: The
Keys to Economic Growth
to Ron Paul.
As the economy
continues in its downward spiral and talks in Congress about reducing
spending have only amounted to political theater, the subject of
how the tax code treats energy has become a topic of controversy.
Specifically, should we subsidize, enforce mandates, or give tax
credits and deductions to industries like ethanol and natural gas?
Having a thriving energy market domestically is a good thing and
something the government should not hinder. Not only would decreasing
our dependence on foreign oil simplify our foreign policy, but it
would greatly enhance our anemic economy at home.
the government should neither inhibit nor subsidize any particular
type of energy. While many people agree with that statement, there
is much confusion over the difference between government subsidies
and tax credits or deductions. The difference is night and day,
yet so many times they are all lumped together as evil government
handouts. A subsidy IS a government handout. It amounts to the government
taking money from the people and giving it to a favored interest.
It is the worst sort of market manipulation and it is something
I can never support. This kind of government mischief is anathema
to the Constitution and the principles of freedom and the free market.
with tax credits and deductions, industries, business, and individuals
simply get to keep more of the money they have earned. Ideally,
the tax code should not be used for social engineering, but, until
we have true tax reform, I will always support tax credits and deductions
that keep more dollars in the private sector where they are spent,
saved, or invested. This means I will support tax credits and deductions
for energy producers, farmers, homeschoolers, family child care
expenditures, expenses of evacuees from disaster areas, and even
adoption expenses. I've almost never met a tax cut, deduction, or
credit I didn't like. Any measure that keeps money in the private
sector to spend, save or invest, rather than allowing the government
to waste or misallocate is a win for the economy.
in the tax code dealing with tax credits should be solved by giving
all participants equal treatment. Removing tax credits is nothing
more than a tax increase.
I oppose ethanol mandates because I do not think anyone should be
forced to use or buy ethanol. Ethanol mandates often serve as corporate
welfare for big agriculture ethanol producers. The marketplace should
decide whether or not to use ethanol, and producers of ethanol have
to discover if they can produce it at a price that makes good business
sense. No industry should be allowed to use legislation to create
a "market" for its products. The real reason ethanol mandates
continue to surface in federal legislation is that agribusiness
continues to have one of the most powerful lobbies in Washington.
Furthermore, while I do not support providing federal grants to
any industry, I do support the tax credits contained in the NAT
Gas Act, HR 1380. These credits reduce taxes for the production
or purchase of vehicles that run on American-made natural gas. These
credits are not subsidies. Of course, we should repeal federal barriers
to energy production and reduce taxes on all forms of energy. Therefore,
I have also introduced the Affordable Gas Price Act HR 1102 which
would remove governmental barriers to offshore drilling, encourage
private investment in new refineries and suspend taxes on gasoline
when the price at the pump reaches a certain threshold. Lowering
taxes to encourage the domestic production of energy and getting
government out of the way of the American energy market is not a
government giveaway; it is the way it should be in a free country.
the Ron Paul File
Paul is a Republican member of Congress from Texas.
Best of Ron Paul