In a little remarked upon move earlier this month, Sen. Max Baucus (D-Mont.) put forward a legislative proposal to raise taxes on energy companies by stripping them of the ability to claim a key tax deduction.
Known as Section 199 relief, the deduction in question has been available to companies engaged in energy production, as well as manufacturing, for several years as an incentive to encourage operations and employment.
Despite Montana’s ability to be a leader in both the energy industry and manufacturing, you can almost certainly guarantee how the spin will play out on this story if it ever lands in the Montana media.
I can already tell you how they’re going to defend this move: they’ll say they are simply getting rid of subsidies for oil companies etc., and the press will let that biased rhetoric pass muster. Letting someone keep more of their own money in order to promote job creation is not a subsidy- it’s a tax incentive. A subsidy is taking someone elses money and giving it to another industry. No matter how you refer to it though, incentive or subsidy, you can bet that some folks will support it regardless.
Meanwhile, how about this other interesting piece of news?
LSU business professor Joseph R. Mason, who has been studying the effects of the Obama administration’s moratorium on drilling on the Gulf Coast community, recently wrote in an op-ed in the Wall Street Journal that according to some research, “this repeal would cause the U.S. to increase its reliance on imported oil from politically unstable nations, cost the economy 637,000 jobs, and reduce household earnings by nearly $35 billion over the next decade.” Dr. Mason further noted that according to the Congressional Research Service, repeal would “adversely affect domestic production and increase imports.”
Oddly enough, I got a call on the talk show yesterday from a gentleman working in Williston, ND. He’s from Bozeman, MT, but said he had to go to the energy fields of North Dakota to find work. I wonder if there’s a subsidy…er-uh…an incentive to get him back to work in Montana?