Chris Prandoni

Repeal Tax Credits, But Don't Raise Taxes


Posted by Chris Prandoni on Monday, May 16th, 2011, 3:36 PM PERMALINK


Originally posted at GlobalWarming.org

Americans for Tax Reform asks every candidate running for Congress to sign the Taxpayer Protection Pledge, a promise to their constituents that they will not raise taxes on Americans or their businesses. The Pledge, signed by 235 Members of the House and 41 Senators, reads:

I___ pledge to the taxpayers of the state
Of___ , and to the American people that I will:
ONE, oppose any and all efforts to increase the marginal income tax
rates for individuals and/or businesses; and
TWO, oppose any net reduction or elimination of deductions and
credits, unless matched dollar for dollar by further reducing tax rates.

The Pledge is by no means a panacea to America’s tax and spending problems, it is a stopgap which identifies tax increases and looks to prevent them. It is the second clause of Pledge that has caused a limited fuss within the conservative movement and, thus, is worth reexamining. Before we proceed, it is important to make the distinction between two types of tax credits—refundable and nonrefundable—as conflating them can lead to unnecessary confusion. A tax credit is employed to reduce a taxpayer’s tax liability, ie reducing the amount of money they must pay to the government. A refundable tax credit allows the taxpayer to reduce their tax liability below zero, meaning the taxpayer is owed money from the government. The outlay effect caused by refundable tax credits is spending. Americans for Tax Reform has unambiguously opposed outlays resulting from refundable credits. I recommend readers take a look here at which refundable credits trigger these outlay effects.

The second type of tax credit, which is much more common, is non-refundable; it cannot reduce a taxpayer’s liability below zero. When conservatives argue for blanket repeal of these credits—or the non-spending portion of refundable credits—they are arguing for higher taxes—repealing these tax policies means more money for Washington’s appropriators. ATR has consistently advocated for the repeal of any number of credits, as long as repeal is offset with identical or greater tax cuts. Offsetting the repeal of energy tax credits and deductions is incredibly easy as most are worth a few billion dollars.

Why is offsetting the repeal of a tax credit, thereby preventing a tax increase, so important? Prohibiting tax hikes draws a line in the sand between supporters of big government and small government. Democrats have no interest in reducing America’s historic spending levels and will only do so when tax hikes are off the table. With the highest corporate tax rate in the world and a high personal income tax rate, raising rates is, thankfully, a heavy lift. Realizing this, Democrats pivoted and are now trying to raise revenue by repealing tax credits and deductions.

Although conservatives are arguing for repeal of particular tax credits and deductions for different reasons—namely market efficiency—they should of wary of supporting the Left’s unambiguous goal—more of your money. Once conservatives begin supporting tax increases through blanket repeal of tax breaks, it becomes enormously more difficult to prevent other tax hikes—like those proposed by the Simpson-Bowles commission, President Obama, and the Gang of Six.

ATR does not universally support or oppose tax credits, which is why we are opposing HR 1380, the New Alternative Transportation to Give Americans Solutions Act. Otherwise known as the Pickens Plan, the NAT GAS Act further obscures America’s already convoluted energy sector. To remedy the overregulation problem in America’s energy market, Congress should be looking to peel back policies that to skew consumer choice, not add additional complexity.

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Tell Congress to Oppose Tax Hikes on Energy Producers


Posted by Chris Prandoni on Sunday, May 15th, 2011, 4:22 AM PERMALINK


In response to skyrocketing gas prices and a stagnant economy, House Republicans have passed three bills which would expand America’s domestic oil production, creating jobs, spurring investment, and reducing America’s dependence on foreign oil. Unfortunately, with a Democrat controlled Senate, it is unlikely Majority Leader Harry Reid (D-Nev.) will allow a vote on these House-passed bills.

Conversely, Democrats have proposed legislation which would raise the price of gasoline by further taxing oil and natural gas producers! The recently introduced, and inaccurately named, “Close Big Oil Tax and Loopholes Act,” is nothing more than a billion dollar tax and will do nothing to alleviate Americans’ pain at the pump.  

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Even with skyrocketing gasoline prices, Dems introduce bill to raise energy producers' taxes


Posted by Chris Prandoni on Tuesday, May 10th, 2011, 4:01 PM PERMALINK


[PDF Document]

Attempting to feign fiscal austerity, Democrats have looked to raise taxes on America’s oil and natural gas producers. With the nation fixated on deficits and debt, Senate Democrats, unwilling to seriously cut federal spending, have introduced the inaccurately named Close Big Oil Tax Loopholes Act of 2011—legislation to repeal expensing deductions and necessary tax policies employed by American oil and natural gas companies.

Are oil companies the recipients of government subsidies?
No, the federal government does not give oil and natural gas companies a cent to produce oil. Unlike other forms of energy, oil and natural gas producers receive zero grants or loan guarantees, nor does the government impose any consumption mandates.

According to its cosponsors, why is this legislation necessary?
“The American people are demanding to know why they are stuck paying $4.00 for a gallon of gasoline …And they want to know why these oil companies should continue to enjoy billions of dollars in subsidies when the working class, the needy, and the elderly are being asked to sacrifice in order to balance the budget?”

  1. No one seriously thinks that raising taxes on oil and natural gas producers will bring down the price of gasoline. In fact, raising taxes on oil producers, makes producing gasoline more expensive
  2. These Senators are purporting to protect the same people they are raising taxes on, “the working class, the needy, and the elderly:” 27 percent of oil companies are owned by pension funds, 23 percent by individual investors, 30 percent by mutual funds, and 14 percent by IRAs. Only 1.5 percent of oil stocks are held by corporate management.

Summary of the bill
Modify foreign tax credit: In order to prevent double taxation, oil and natural gas companies are allowed to credit income taxes paid abroad from their US income statement. Senate Dems have proposed to limit the amount US oil companies can deduct, crippling American companies competing abroad.

Repeal Sec 199, only for oil companies: In 2004 Congress enacted Section 199, the domestic manufacturing tax deduction. Not trying to hide their bias, Senate Democrats are attempting to repeal Sec 199—which is employed by every domestic manufacturer—only for oil and natural gas companies.

Repeal or limit expensing: Consistent with the belief that taxes should be paid only on profits, oil and natural gas companies are allowed to expense some of the costs associated with drilling a well or the lease purchase.  

Supporting more than 9.2 million domestic jobs, America’s oil and natural gas producers are a pivotal part of the American economy. Repealing this industry’s expensing policies won’t put a dent in the deficit but will kill thousands of jobs and encourage Washington’s reckless spending habits.

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To Fund Bloated Government, Dems Target Oil Companies


Posted by Chris Prandoni on Wednesday, May 4th, 2011, 3:36 PM PERMALINK


This article was originally posted at Townhall.com

Unwilling to reign in Washington’s overspending problem, Democrats and their allies on the Left are stuck championing tax increases. Raising the corporate income tax rate—already the highest in the world—or increasing the personal income rate is untenable, leaving Democrats no choice except to try and repeal tax credits and deductions.

With oil and natural gas companies releasing their first quarter earnings this week, look for revenue hungry Democrats and to set their sights on this industry. First out of the gate is the League of Conservation Voters (LCV) which began asking Members of Congress to pledge to raise taxes on American oil and natural gas companies by eliminating a handful of pro-growth deductions. The LCV pledge reads:

“With five biggest public oil companies enjoying $60 billion in profits and Americans struggling with high gas prices, we should no longer force Americans to subsidize oil companies. I hereby pledge to end taxpayer subsidies and handouts for oil companies.”

Let’s cut through the hyperbole. Unlike renewable sources of energy which received $60 billion in taxpayer dollars since 2008, the American government doesn’t give oil and natural gas companies a cent to produce oil. The LCV’s characterization of tax credits and deductions as subsidies is intentionally misleading. A subsidy is when the government takes money from you and gives it to someone else, like a solar company. Allowing a company to keep more of its earned money by employing a tax credit is anything but a subsidy.

You would think from the LCV’s pledge that oil and natural gas companies pay virtually no taxes and are gaming the system for profit. This could not be farther from the truth: paying nearly $100 million a day in income taxes—and $300 billion in total income taxes between 2004-2008—the oil and natural gas industry’s effective income tax rate is 48 percent, compared to 28 percent for other S&P Industrial companies. And that’s just income taxes, those numbers don’t even include an additional $60 billion in non-income taxes or $350 million in excise taxes paid on petroleum products.

Furthermore, it is worth asking who profits when oil companies prosper. Apart from the 9.2 million people the industry employs, 27 percent of oil companies are owned by pension funds, 23 percent by individual investors, 30 percent by mutual funds, and 14 percent by IRAs. Only 1.5 percent of oil stocks are held by corporate management. This means that if you or your employer has been saving for retirement, well, you are likely part of Big Oil. Gasp!

And then there’s the matter of gasoline prices. As a commodity, oil prices are subject to speculation from investors who access global supply and demand. When you spend a dollar on gasoline, 68 cents from that dollar go towards purchasing the crude oil and 18 cents is used for refining and retailing. The remaining 14 cents is forked over to the government in excise taxes.

If Democrats really wanted to alleviate Americans’ pain at the pump, they could reduce the gasoline excise tax. Revealing their true intention, more revenue, Democrats are arguing for higher taxes on oil and natural gas companies—it is hard to imagine how further taxing oil and natural gas companies would bring down the cost of gasoline.

The truth is Democrats would rather demonize oil and natural gas companies than make necessary spending cuts. Leadership is making tough decisions about which programs to cut, bolster, or eliminate, not which companies to tax.

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GOP backs EPA into a corner, they come out...rapping?


Posted by Chris Prandoni on Thursday, April 21st, 2011, 12:49 PM PERMALINK


With the public increasingly frustrated with the EPA’s power grab, the agency is ramping up its pr efforts pushing back against Americans’ concerns about federal overreach…with a rap? Releasing “Click it—flip it,” a song that would make Vanilla Ice blush, the EPA’s new education campaign for children is as weird as it is inaccurate.

The MC warns listeners what is at stake, due to global warming, “the bears don’t even know when to take a nap. On top of that, it’s not cool, when the flood waters rise and mosquitoes rule.” Thankfully, we have the EPA to stave off the coming mosquito apocalypse where bears plagued with insomnia battle Kevin Costner for scarce resources.

Phew, thanks for looking out, EPA. So what should we do to stop Tyrannical Mosquitoes?      

“A 5 minute shower is all that’s needed to keep energy from being depleted. A long sleeve sweater is what I know will keep you toasted and the fuel bills low.”

Oh, that’s it?

And don’t forget, don’t ever forgot, to “click it—flick it, turn the handle to the right. Turn off the water push the handle real tight. Slip on some sneakers lace them up tight, leave the car parked you know that’s all right. Public transportation is the way to go you know, it’s one of the ways to keep emissions low.”

While showing a lack of creativity (the chorus’ rhyme scheme: right:tight:tight:right) even for federal bureaucrats, their creepy suggestions about how long children should shower for have nothing to do with what the EPA is really up to—regulating America’s energy companies and manufacturers out of business, and raising energy prices for every American.

Far from being an innocuous steward for the public good, the EPA is a politicized agency used to circumvent the will on Congress.   

Drop the beat, EPA!

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Fact Checking Cenk Uygur's "Rigged Game: Subsidies for Oil Companies"


Posted by Chris Prandoni on Monday, April 11th, 2011, 2:27 PM PERMALINK


Click here for a PDF copy.

Unwilling to reign in Washington’s overspending problem, Democrats and their allies are stuck arguing for higher taxes. Raising the corporate income tax rate—already the highest in the world—or increasing the personal income rate are untenable, leaving Democrats no choice except to advocate for the repeal of tax credits and deductions.

In this vein, MSNBC Anchor Cenk Uygur has launched a miseducation campaign on the tax policies employed by the oil and natural gas industry.

Uygur: “It’s estimated that every year the United States Government gives approximately 4 billion dollars in tax subsidies to oil and gas companies.”

Fact: Unlike other sources of energy—wind, solar, ethanol, etc—the government does not give oil and natural gas producers any grants or loan guarantees, nor does it impose any consumption mandates. Since oil and natural gas companies receive none of the above actual subsidies, Uygur targets deductions these companies can write off on their income statement:

Subsidy?: Allowing a company to keep its own money is not a subsidy. The government taking money from Mr. Uygur and giving it to me is a subsidy, I have no claim on that money. Allowing Uygur to keep his own money, by employing a tax credit or deduction, is not a subsidy.

Uygur: “If I got $4 billion a year in subsidies, I’d be pretty good in that sport to. I wouldn’t have to work very hard at all.”

Fact: Since 2008 Congress has spent $65 billion funding renewable projects. Even after receiving enormous taxpayer subsidizes; these forms of energy are anything but ubiquitous. Again, the $4 billion Ugyur calls a subsidy is anything but—the government doesn’t spend a single dollar facilitating oil and natural gas production.

Uygur: “Meanwhile, we all know that these companies are pulling in absurd profits. Last year alone, the top five oil and gas companies earned a total of $77.4 billion in profits.”

Fact: Implicit in this statement is the sentiment that oil and natural gas companies are not “paying their fair share,” and gaming the system to achieve profits. This could not be farther from the truth: paying nearly $100 million a day in income taxes—and $300 billion in total income taxes between 2004-2008—the oil and natural gas industry tax expenses averages 48 percent, compared to 28 percent for other S&P Industrial companies. This number does not include an additional $60 billion in non-income taxes or $350 in excise taxes paid on petroleum products.

Supporting more than 9.2 million domestic jobs, America’s oil and natural gas producers are a pivotal part of the American economy. Repealing this industry’s tax policies won’t put a dent in the deficit but will kill thousands of jobs, and encourage Washington’s reckless spending habits.

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Why NMB Union Elections are Different than Congressional Elections


Posted by Chris Prandoni on Monday, March 28th, 2011, 11:24 AM PERMALINK


Originally posted at WorkerFreedom.org.

Click here for a PDF copy.

With the imminent FAA Reauthorization bill containing a provision to annul the National Mediation Board’s (NMB) Minority Rule decision, it is imperative that Members understand what exactly Title IX in the FAA bill does. In short, it reflects the principle that Congress should determine and legislate significant changes in labor law, not unelected agency appointees.

The three-member NMB—two of whom are former union officials—ruled in 2010 that a majority of voting members were required to certify a union at airlines and railroads, not a majority of all members of a workforce. This move to facilitate unionization and overturn seventy-five years of labor law, supported by both parties, encapsulates concerns about federal overreach.

In response to these concerns, unions and their political allies have claimed that the “The NMB is applying the same rules to union elections that are used for congressional elections.” This is profoundly misleading. Union elections and Congressional elections are fundamentally different in numerous ways:
 
Tenure- Unlike Congresspersons or Senators who must stand for re-election every two or six years, transportation unions may never again be subject to another election. Due to the NMB’s arcane, pro-union rules, union certifications continue indefinitely, and while one union can replace another, no large airline or rail workgroup (with more than 400 members) has ever been able to vote to eliminate union representation. That is why, even under the traditional voting rules, the percentage of employees subject to union representation at airlines (60%) and railroads (84%), has been so much higher than the average in the private sector (7%). With no imminent election, it becomes impossibly difficult for workers to hold their union accountable
 
Voting- Unlike elections for government officials, union elections at airlines and railroads typically last for four to six weeks giving workers ample time to vote—workers can vote from any computer or telephone they choose to use, from their home or anywhere else! Claims by unions that workers who have a family emergency or fall ill will be silenced are intentionally misleading.
 
Electoral Mulligan- In a recent Delta election where workers voted against unionization, unions have run to the NMB claiming foul play—thereby necessitating another election. Some of the unions’ more ridiculous claims are that Delta encouraged too many people to vote and that union polling showed they should win. Imagine having to hold another election because your get-out-the-vote drive was too successful or because your opponent’s poll showed they would win. Furthermore, what if the people who get to determine whether to overturn the election results are three politically appointed board members—two of which are from your opponent’s party.
 
Forced Support- Once elected, transportation unions force their “members” to pay monthly dues. If a worker refuses to pay the union, well, they are fired—membership is not optional. State right-to-work laws do not apply under the Railway Labor Act. Even if I disagree with my Representative, I am not forced to cut him monthly checks simply because he is my Representative.
 
AWF urges Members to oppose all measures to strip Title IX out of
the FAA Reauthorization Bill

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Union v House Republican Showdown Scheduled for Next Week


Posted by Chris Prandoni on Friday, March 25th, 2011, 10:03 AM PERMALINK


Orginally posted at BigGovernment.com

Ever since Obama was sworn in, obscure federal agencies have been churning out pro-labor, anti-worker rulemakings in an attempt to reverse declining unionization numbers. Indicative of this unionization through regulation strategy is the National Mediation Board’s (NMB) minority rule decision promulgated in 2009.

The NMB is a three-member board comprised of one Bush holdover and two Obama appointees—both of which are former union officials—tasked with overseeing union-employer relations in the transportation industry. The makeup of the board effectively gives the pro-union board members fiat to enact whatever policies or regulations they see fit. Unsurprisingly, the NMB’s first major decision was a move to facilitate unionization in the transportation industry.

Overturning seventy-five years of precedent and two Supreme Court rulings, the NMB ruled that a majority of voting members were required to certify a union, not a majority of all members of a workforce. For two years now, conservative activists and Members of Congress have written letters and introduced legislation attempting to annul this blatant federal overreach. These efforts have finally culminated in tangible legislation, Title IX of the FAA Reauthorization bill, which would overturn the NMB’s minority rule decision.

Click here to read more.

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After Long Fight, Republicans Reprimand EPA


Posted by Chris Prandoni on Tuesday, March 15th, 2011, 10:31 AM PERMALINK


Originally posted at The Washington Examiner

Yesterday, the Energy and Power Subcommittee passed the highly anticipated, much debated Energy Tax Prevention Act, legislation which returns the obligation of setting America’s climate policy to Congress from the Environmental Protection Agency. Yesterday’s vote is the culmination of two years of doggedness by Republicans who have been fighting an uphill battle against well-funded Democrats, environmentalists, and unions.

More substantively, the Energy Tax Prevention Act prohibits the EPA from using the Clean Air Act to regulate greenhouse gases. Since losing the Cap-and-Trade debate, Democrats have relied on the EPA to impose their preferred energy policy on the country. The impetus behind Cap-and-Trade was to force Americans to move towards less efficient, more expensive sources of energy. Likewise, the EPA is attempting to achieve this end through the regulation of greenhouse gases.

 The Republican message that resonated so well in the fall of 2010 is still ringing true—it is Congress’ job to determine this country’s energy and climate policy, not the EPA’s. While a majority of Americans certainly would prefer to have their elected official dictating policy over federal bureaucrats, they also want a job to wake for everyday. The EPA’s regulations would have exacerbated our frustratingly high unemployment rate and unnecessarily inflated Americans’ utility and gasoline bills. In what would amount to a deathblow for America’s manufacturers and many of its coal producers, it is hard to exaggerate how destructive the EPA’s regulations would be—literally hundreds of thousands of jobs would be lost over the coming years.

If the Energy Tax Prevention Act is not signed into law, oil, natural gas and coal refiners will have to invest tens of millions of dollars arbitrarily upgrading facilities. Energy producers that cannot afford these upgrades will be forced to close their doors. These regulations effectively choke off the supply of energy, thereby, increasing its price. America’s manufacturers, who are hanging on by a thread due to onerous federal regulations and increased competition abroad, would be forced to ship jobs overseas. New energy companies looking to meet the country’s energy demands will have to apply for permits from the EPA—a process no one, not even the EPA, thinks the agency has the capacity to handle.

Chairman Fred Upton (R-Mich.), Subcommittee Chairman Ed Whitfield (R-Ky.), and Senator Jim Inhofe (R-Okla) should be applauded for their job creating legislation. Expected to pass out of the Energy and Commerce Committee on Tuesday and the House soon thereafter, the real fight will be in the Senate. Senator Rockefeller (D-W.Va.) has proposed a toothless EPA bill in an attempt to scuttle the Energy Tax Prevention Act and give Democrats cover in 2012. This will not work, their secret is out.

Yesterday’s vote shows how far we have come in the past two years. Americans are looking for jobs, economic growth, and lower energy bills—not a backdoor Cap-and-Trade scheme from the EPA.

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