Effective democratic governance depends on the quality of discourse, which plunges when elected officials jettison truth to pursue political aims.
Exploiting anger over high gasoline prices—about which no one can do anything except use less gasoline and wait—many elected officials want to raise taxes on oil and gas companies under the pretense of ending subsidies. There, they traffic in falsehood.
“Do these very profitable companies actually need taxpayer subsidies?” asked Max Baucus (D-Mont.), chairman of the Finance Committee, during the latest grilling on Capitol Hill of top executives of major oil companies.
In fact, these companies don’t need subsidies. More to the point: They don’t have any.
What they have are accounting deductions equivalent to those of companies in other industries, some with special names and modes of application to reflect the peculiarities of extractive industries.
Those deductions aren’t subsidies. Calling them that is a propaganda trick employed by too many politicos, starting with President Barack Obama.
In tax accounting, all businesses deduct normal expenses from gross revenue in calculations of income subject to taxation.
Yet Democrats in Congress and the Executive Branch repeatedly misrepresent deductions used by oil and gas companies as subsidies inappropriate in a period of high oil prices and monster deficits. Then they bluster about ending them.
They also want to deny oil and gas companies the use of a deduction generally available to US manufacturers and to remove a credit for taxes paid to foreign governments.
All because large companies that produce oil are—unsurprisingly—reporting large profits while oil prices are high.
“I don’t think you have any idea what the size of your profits does to their [members of the public] ability to accept what you say,” John D. Rockefeller IV (D-W.Va.) told the oil company executives.
Nonsense. Big profits by big companies in a big industry have nothing to do with credibility.
The same can’t be said for deliberate deception about an arcane subject, promulgated for political advantage.
(Online May 13, 2011; author’s e-mail: email@example.com)