There is no get-out-of-jail-free card for America’s small business owners — when times are tight they have to find new ways to stretch their resources in order to keep their doors open and stay competitive. Which is why it is so disappointing to see how our leadership in Washington is handling our current financial situation.
Instead of addressing the fiscal cliff by ratcheting back unnecessary spending and making government more accountable, some of our elected officials are looking to the taxpayers to provide them a get-out-of-jail free card. One way policy makers in Washington are looking to “increase revenue” — or in other words, ask you to bail them out — is by increasing taxes on American energy producers.
American companies that have operations abroad benefit from what is known as the dual capacity tax credit, which prevents companies from being double taxed on income earned abroad. It stands to reason that if a company pays income tax to a foreign country where they earned the income, they shouldn’t have to pay tax again to the United States on the same income. It’s a standard tax practice around the globe to ensure that foreign companies can compete abroad.
But now that our elected officials are facing down the fiscal cliff they want to exclude our domestic energy producers (and only them) from the dual capacity credit and force them to pay taxes on their profits, not just once, but twice. Under such an unfair tax regime, it’s hard to imagine how American energy companies would be able to compete in foreign markets.
This drastic increase in taxes on American energy producers would not only hurt small businesses, but would have a financial impact on individual consumers as well as the nation as a whole.
Small business owners are already having a hard enough time keeping the lights on and the doors open in our stagnant national economy, and increases in energy taxes would only worsen that problem by increasing energy prices for consumers. If our government really wants to spur economic growth, then they need to look towards cutting taxes and decreasing costs for businesses in a way that will allow them to grow and hire more workers, not increase the burden on America’s job creators.
Excluding our energy producers from the benefits of the dual capacity rule discourages companies from investing in expanding exploration efforts and innovative new technologies that would help American become more energy independent.
Forcing our producers to try to compete on such an uneven playing field would essentially be subsidizing foreign energy production, allowing our competitors abroad to surpass us even further in terms of the efficiency and cost effectiveness of their energy production.
Instead of looking to consumers and taxpayers to bail our government out of jail for their irresponsible financial decisions, I hope that they will look at the bigger picture and realize that increasing taxes on the businesses that can revitalize our economy will cause more harm than good and instead focus their efforts on conserving funds and cutting spending.
Rep. Mike Miller