In the midst of a spike in energy prices and 9 percent unemployment, the Senate is going to stage a vote on energy taxes. The Hill notes: “The nonpartisan Congressional Research Service says the bill will have no impact on gas prices.” But that’s Democratic policy for you — flashy and unhelpful. Democratic policy may not be about problem-solving but it is, these days, almost entirely about class warfare and a phony populism. The Hill reports:
The bill faces major hurdles to passage in the Senate — two previous attempts to cut oil industry tax breaks failed in the chamber. But Democrats are hoping they can score some political points during the four-hour debate on the bill Tuesday amid soaring oil industry profits and $4-a-gallon gas.
The legislation would cut a slew of tax breaks for the five largest oil companies: Exxon Mobil, Shell, BP, ConocoPhillips and Chevron. The effort, Democrats say, would save $21 billion over 10 years, and the money would go to reducing the deficit.
Under a unanimous consent agreement, Senate leadership also agreed to hold a vote Wednesday on a Republican offshore drilling bill that mirrors legislation passed by House Republicans in recent weeks.
The bill, introduced by Senate Minority Leader Mitch McConnell (R-Ky.), would require the Interior Department to hold lease sales in the Gulf of Mexico and off the Virginia coast; would set a timeline for review of pending offshore permit applications; and would extend leases in the Gulf for one year, among other things.
Neither measure will immediately lower gas prices, but the Democrats’ proposal never will and McConnell’s is at least designed to affect supply and demand (which drives prices).
There is a way, of course, to get bipartisan passage for a bill to end oil tax breaks: tax reform. Rep. Paul Ryan (R-Wis.) proposed just that, formulating a flatter, simpler tax code that will eliminate a lot of these special breaks. The debt commission had a similar idea (“Tax reform should lower tax rates, reduce the deficit, simplify the tax code, reduce the tax gap, and make America the best place to start a business and create jobs.”) This, frankly, is yet another missed opportunity by the president, who suggested tax reform in his State of the Union and has done nothing but propound ideas for tax hikes.
The House Budget Committee's Web site has this response to the president’s rhetoric on taxes. It was drafted with reference to the House budget, but it is equally applicable in the energy tax context:
CLAIM: “Worst of all, this is a vision that says even though America can’t afford to invest in education or clean energy; even though we can’t afford to care for seniors and poor children, we can somehow afford more than $1 trillion in new tax breaks for the wealthy.”
REALITY: The House Republican budget keeps revenue within its historical range of 18-19 percent of GDP. The President’s distortion is based on the fact that our budget prevents $1 trillion in tax increases. Many Democrats have claimed that our plan includes huge new tax cuts for the rich. This is completely false. Our plan calls for revenue-neutral tax reform along the lines of what the President’s Fiscal Commission proposed — lower rates with a broader base. The President appeared to have endorsed this idea in his speech, but he also called for higher rates. Despite this contradiction on tax policy, the President was clear in his intent to raise taxes again on job creators and American families.
Voters won’t be able to say they don’t have a choice in 2012. One party plainly believes in higher taxes, the other in tax reform. One party wants to keep feeding the domestic spending spree, the other wants to go beyond “shared scarcity.” The presidential contest may be the most refreshing battle of ideas we’ve seen in a long time.