Energy is an important issue for American manufacturers—we consume one-third of our nation’s energy, both as fuel and as a feedstock and NAM has been in the forefront of encouraging the development of new and affordable sources of energy. It’s an important issue for American families, too who share our interest in dependable—and affordable—energy sources. 

So we’re concerned about proposals to raise taxes on the energy industry that will take us even further from our goal.  Quite simply, increased taxes for energy companies will increase the costs of fuel to American energy consumers and manufacturers. The debate over energy policy should not be about imposing new taxes or new costs on the U.S. energy industry.

There are those that seek to distract from our need to create more energy by demonizing the very industry that can provide it. This type of demagoguery isn’t right and it certainly isn’t productive. Rather, the debate should focus on enhancing America’s energy security through increased production of all types of energy, improved conservation and energy efficiency, more research on technology and alternative energy, increased access to domestic sources with continued environmental protections, and improved distribution.

Manufacturers were disappointed to hear the President, once again, call for increased taxes on energy companies during his speech today in North Carolina. Despite growing anxiety in recent weeks about the increasing cost of gasoline and predictions of $5 a gallon gas, the Administration continues to push for punitive tax increases on the oil and gas industry.

The increased costs actually would make a bad situation worse by discouraging oil and gas investments in the United States, increasing energy costs and making us less competitive and threatening job creation and the broader economy. The NAM has long held that the debate about energy policy should focus on enhancing America’s energy security by encouraging new investments in affordable sources of energy, not with new and higher taxes.

President Obama renewed his call on Congress to raise taxes on oil and gas companies today during a press conference at the White House.  The President didn’t break any new ground with regard to policy this morning, but his comments do provide another opportunity to make the point: Don’t make energy more expensive!

Manufacturers depend on affordable energy to make products Americans and consumers around the world depend on and use every day.  Higher energy prices have a direct impact on every American–chances are some kind of fuel was used either to make or transport virtually everything we touch.

Now is the wrong time to raise energy taxes.  It will hurt job creation and further burden manufacturers, which are already strained by rising raw material costs and costly regulations, to give two examples.

Tonight, Senate Majority Leader Reid is planning a “test” vote, to gauge the support for on increasing taxes by 20 billion dollars on major oil companies in the United States. While the odds are against get the support of 60 Senators to move forward on this legislation, this is political theater, pure and simple. The purpose of the vote is to demonize successful companies that are working hard every day to increase domestic energy production to help reduce our dependence on foreign oil.

The Senators pushing S. 940 know that increasing taxes on oil companies will not lower gas prices. In fact, members on both sides of the aisle have already acknowledged this. This is simply another ruse for Senator Reid to continue his tax and spend policies that have failed, time and again. And the suggestion that any increased revenue from raising taxes has absolutely no merit and is simply laughable!

This legislation would impose punitive and discriminatory taxes on specific companies within one industry. Congress should not be in the business of picking winners and losers. Who is next, could it be your company – what is your profit margin? If Congress decides to step on this slippery slope, any business should be worried that they will be punished with excessive and targeted taxation as a result of their success.

Unfortunately, the Senate leadership has taken their eye off the ball and decided to focus their energy on impeding job growth and discouraging future investment, when they should be working alongside energy companies that are seeking to produce new domestic energy to reduce our dependence on foreign oil.

The end result of this legislation would be to punish those who have succeeded in the free market and an increase in the cost of energy. This would increase in the cost of doing business, affecting the global competitiveness of manufacturers, and their ability to create jobs. This will ultimately hurt the consumer. S. 940 will only stifle any potential economic growth, which is yet another slippery slope as our nation is in the midst of crawling out of a serious recession.

Dorothy Coleman is vice president for tax and domestic economic policy. National Association of Manufacturers.

The National Association of Manufacturers today sent a “Key Vote” letter to the U.S. Senate expressing opposition to S. 940, the tendentiously entitled Close Big Oil Tax Loopholes Act. A vote on cloture is expected at 6:15 p.m. this evening.

From the letter:

S. 940 would impose more than $20 B in discriminatory taxes on the oil and gas industry under the guise of “eliminating subsidies.” In particular, the bill would increase taxes on the income from U.S. oil and natural gas production, refining and processing and discourage new oil and gas investments in the United States by making domestic energy investments less competitive economically with foreign opportunities. The bill also would guarantee that income from certain overseas investments by U.S. energy companies would face double taxation, reducing the ability of U.S. energy companies to compete for global natural resources that are critical to U.S. energy security.

Manufacturers consume one-third of our nation’s energy and the NAM has long supported the development of new and affordable sources of energy. Increased taxes for energy companies will increase the costs of fuel to American manufacturers and other energy consumers. The debate over energy policy should not be about imposing new taxes or new costs on the U.S. energy industry. Rather, the debate should focus on enhancing America’s energy security through increased production of all types of energy, improved conservation and energy efficiency, more research on technology and alternative energy, increased access to domestic sources with continued environmental protections, and improved distribution.

NAM Key Votes are determined by an advisory committee of NAM member companies, both large and small. The votes are used to rate a member of Congress’ record on manufacturing-related issues.

A round-up of coverage and commentary on the Obama Administration’s budget proposal for Fiscal Year 2012…

Aric Newhouse, senior vice president, National Association of Manufacturers, NAM statement:

Unfortunately, President Obama’s budget plan … contains higher taxes for virtually all manufacturers – a direct threat to growth and manufacturing jobs. Increased income taxes on companies with worldwide operations, increased energy taxes and income taxes for small and medium-sized companies will make manufacturers less competitive.

Jack Gerard, president, American Petroleum Institute, “Administration tax hike will hurt jobs, cut government revenue“:

It’s no surprise the administration is proposing yet again to raise taxes on the U.S. oil and natural gas industry.  But it’s still a bad idea and comes at one of the worst times in our economic history.  The administration continues to ignore the fact this industry is among the nation’s largest job creators and delivers enormous revenues to government at all levels.  The industry pays income taxes, royalties and other fees totaling nearly $100 million every day and pays income tax at an effective rate far higher than most other industries.

 Besides eliminating thousands of new potential jobs, the increases, over the long term, would actually lower revenue to the government by many billions of dollars as a result of foregone revenues from projects the tax hikes would prevent going forward.

Dean Zerbe, Forbes, Capital Tax blog, “Obama’s Budget Proposal and Taxes: Lots of Regifting“:

The tax proposals in the administration’s FY 2012 budget released today is a combination of regifting (lots of old and cold proposals that didn’t go anywhere even when the Democrats ran the whole show) and some new proposals that will take a good deal of energy to get moving in this Congress. (continue reading…)

A full-page ad in today’s The Hill. Message: A vote for higher energy taxes is a vote to raise taxes on consumers, manufacturers, small businesses and American workers.
The Hill Full Page Print Ad Sept23

The National Association of Manufacturers has a full-page ad in today’s Roll Call, building on our Manufacturing Means Jobs! campaign. Excerpt: 

Congress has returned to Washington declaring “jobs” to be a priority, even as some members promote the very opposite – the anti-jobs agenda of higher energy taxes.

The proposed energy tax increases would drag down the economic recovery, hurt manufacturers and small business, and force consumers to pay more to fill up their cars and heat their homes.

Anticipating proposals from a returning Congress and President Obama to pay for new spending initiatives (or “targeted” tax breaks) by raising taxes on energy production, the National Association of Manufacturers on Sept. 2 sent a letter to House and Senate leadership expressing the NAM’s opposition. The letter, signed by the NAM’s Keith McCoy, vice president for energy and resource policy, objects to the revisions to what’s known in Capitol argot as Sec. 199. Excerpt:

Sec. 199—enacted in 2004—is designed to reduce the tax burden on domestic manufacturers to help spur investment in the United States and create U.S. jobs. The U.S. statutory corporate tax rate currently is 35 percent, almost 10 percentage points higher than the average corporate tax rate for other countries in the Organization for Economic Cooperation and Development. The Sec. 199 provision helps mitigate this tax burden for all domestic manufacturers.

The NAM strongly opposes discriminatory tax policies, especially when they single out a particular type of business or industry sector for non-deductible treatment. Excluding the income from U.S. oil and natural gas production, refining and processing from the Sec. 199 tax benefit will discourage new oil and gas investments in the United States by making domestic energy investments less competitive economically with foreign opportunities. (continue reading…)

The National Association of Manufacturers today began TV and radio advertising in nine states to oppose tax increases on energy production, which some members of Congress want to enact when they reconvene in Washington next week.

In a statement, NAM President and CEO John Engler said: “Our message to Congress is very clear. At a time when unemployment remains over 9 percent, costly energy taxes will make our nation’s economic situation worse by raising costs for businesses and consumers and hurting businesses’ ability to compete in a global marketplace. We are encouraging manufacturers, small businesses and the public to tell Congress to say yes to jobs and no to higher energy taxes.”

The National Federation of Independent Business is joining the NAM in sponsoring the ads. Thank you, NFIB!

Television and radio spots will run in Arkansas, Colorado, Indiana, Maine, Missouri, Nevada, Ohio, Virginia and West Virginia. The spots urge Senators in the states to, “Say yes to jobs, and no to higher energy taxes.”

The Wall Street Journal’s John D. MacKinnon has blogged on the new campaign, “Business Groups Target Higher Energy Taxes.”