An editorial by former Congressman Harold Ford aroused my curiosity …
The subject was President Obama’s opposition to domestic oil drilling.
The part that caught my eye had to do with the “tax loopholes” that Obama was repealed because oil company profits – and gas prices — are rising.
Ford says:
“Why, when gas prices are climbing, would any elected official call for new taxes on energy? And characterizing legitimate tax credits as “subsidies” or “loopholes” only distracts from substantive treatment of these issues.
Lawmakers misrepresent the facts when they call the manufacturing deduction known as Section 199—passed by Congress in 2004 to spur domestic job growth—a “subsidy” for oil and gas firms.
The truth is that all U.S. manufacturers, from software producers to filmmakers and coffee roasters, are eligible for this deduction.
WSJ, Washington vs. Energy Security, MAY 11, 2011
What’s the loophole”?
Sec. 199 is officially the Domestic Production Activities Deduction.
It says that a business engaged in a qualifying production activity is eligible to take a tax deduction of 9%.
What’s a qualifying production activity?
Qualified domestic production activities include: “the production of electricity, natural gas or potable water in the U.S. and the manufacture, production, growth or extraction of tangible personal property, computer software,, including the development of video games, or sound recordings or qualified films “
Hmmm.
Why isn’t the President talking about the tax loopholes for CDs, films and video games?
Take the tax advantage away from oil companies, but preserve it for video game makers.
You just can’t make this stuff up …
The Homa Files 
May 12, 2011 at 8:20 am |
Great post. Thanks for the info. I admit I bought the rhetoric. I am strongly anti-subsidy because it picks winners and losers so I was supportive of this measure because I trusted that the message was truly anti-subsidy. I should have known better.
May 12, 2011 at 11:21 pm |
The oil execs did a great job on The Hill today show that the privative sector is only allowed to create and keep wealth at the whim of the government. Instead of enumerated powers for the federales, we have enumerated rights for citizens.