What do you do when the price of an essential commodity has risen so high that it fuels inflation, devastates family budgets and threatens the economy? Obviously, you raise taxes on it, causing its price to go up even more!
At least, that’s what you do if the commodity is energy and you’re a politician.
Fortunately, Texas’ senators, Kay Bailey Hutchison and John Cornyn, didn’t go along with the pack, and helped defeat new tax proposals in the energy bill. Unfortunately the U.S. House fell for this counter-productive strategy.
When the Senate was asked to vote on $32 billion in new taxes for U.S. energy producers – with the revenue intended to support alternative fuel development, among other things – a majority of them saw the fallacy of this strategy. It simply doesn’t make sense to over-tax proven fuels so as to prop up still-emerging alternative energy technologies that are less efficient and more costly.
Fossil fuels are going to be a major part of our energy supply – and economy – for a long time; that’s just a given. No matter how much money the government spends trying to introduce alternative fuels before they are technologically and economically ready, it’s going to be decades before they effectively diminish our need for traditional fuels.
The decision we need to make is whether we want to meet as much of that need as possible with domestically produced energy, or do we import more and more fuel from foreign countries.
I think it’s obvious that most Americans would want to use domestic energy reserves over foreign imports. Unfortunately, higher taxes on U.S. energy firms would make that even more difficult.
Taxes deplete capital that could be reinvested in exploration, infrastructure improvements and production upgrades. They take away the legitimate gains of countless Americans who put part of their savings in energy stocks through their retirement plans and mutual funds. The more government takes away, the more these key backers will withdraw from energy investments.
At a time when we should be doing everything possible to shore up domestic energy production, some Washington lawmakers seem to be on a mission to cut it off at the knees. By arbitrarily selecting which energy sources consumers can choose from, Congress is assuring us of smaller energy reserves, higher retail prices and a sluggish economy.
The House has inexplicably approved new taxes on U.S. energy producers in their bill. The battle now lies in conference committee, where the final version we all must live with will be decided.Â
For sake of Texas’ future – and the future of our nation’s economy – I hope Senator Cornyn and Senator Hutchison continue to lead the fight against this ridiculous plan.
