News Center

October 7th, 2010

National Taxpayers Union Praises Grassley

Written by Duane Parde
President, National Taxpayers Union

In recent weeks, Iowans may have noticed ads popping up on their television sets urging Senator Chuck Grassley to vote no on new taxes on American energy.

I’m glad to report that Iowa’s senior Senator has assured NTU that he won’t be supporting these new energy taxes, and has in fact already cast a vote[1] that shows he plans to stand by this position.

In one of the first votes after their return from the month-long August recess, the Senate took up an amendment that would have increased taxes on American energy by $17 billion. Understanding the potentially damning impact of this tax hike on job growth and economic recovery, Senator Grassley stood and said “no.” His colleagues agreed, and the tax was turned back.

Unfortunately, Grassley’s vote doesn’t mean that consumers are out of the woods yet.  Democrats both in Congress and the White House have made clear their intent to keep energy squarely in the crosshairs through the rest of the session. More proposals will seek to increase the already massive tax burden of American energy producers, threatening jobs and slowing economic recovery.

For instance, the $50 billion price tag of the just-announced second stimulus would be funded primarily through increased taxes on American energy. The President’s FY2011 budget blueprint slaps billions in new taxes on energy[2]. And on top of it all, extension of expiring Bush-era tax cuts will have Democrats as thirsty for revenue from energy taxes as ever[3].

Advocates for these tax schemes are pushing for modifying “dual capacity” tax rules – in effect creating a destructive “double tax” that would apply only to energy providers based in the U.S. Shockingly, state-owned competitors in countries like Venezuela and China – even foreign-owned BP – would be exempted from the rule and handed a significant edge over American firms[4]. In effect, this proposal would amount to handing companies like BP and CITGO their own U.S.-taxpayer-funded “stimulus.”[5]

Pursuing policy such as this – that gives a financial boost to BP and Hugo Chavez while slamming home-grown American energy providers – is incredibly ill-advised. As taxpayer advocates devoted to assuring that Americans have the information they need to protect themselves from job-killing taxes, our ads in Iowa and throughout the nation describing this threat are of critical importance.

Levying increased taxes on American energy, particularly during our tenuous-at-best recovery, is a recipe for prolonged recession, higher consumer energy costs, and heavy job loss. Recent analysis, in fact, found that the proposed taxes would result in the loss of around 154,000 jobs by the end of 2011[6].

In any economy, such legislating is suspect. In this economy, it’s borderline criminal.

We need lawmakers like Senator Grassley to hold strong against the push for increased energy taxes. Otherwise, unemployment will worsen[7][8], the economy will continue to falter[9][10], energy prices will increase[11][12], and our international competitors will be handed a major competitive advantage[13].

Iowans should be thankful to have Grassley’s voice in the Senate. He speaks his mind, he votes with his conscience –and he truly engages on the issues to assure his votes are in the best interest of his constituents.

We thank Senator Grassley for his opposition to new energy taxes, and ask that he speak out and stay firm in opposition to this job-killing[14] policy.

Duane Parde is President and Chief Operating Officer of the National Taxpayers Union. Serving over 362,000 members, NTU is a nonpartisan, nonprofit citizen organization founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels.


[1] http://senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00232

[2] FY 2011 US Budget, Summary Tables

[3] “E2 Morning Roundup: Obama looks at oil incentives to pay for infrastructure” The Hill, Sept. 7, 2010

[4] “Congress’s Hugo Chávez Bailout Bill,” Wall Street Journal, July 30, 2010

[5] “Congress’s Hugo Chávez Bailout Bill,” Wall Street Journal, July 30, 2010

[6] “Regional and National Economic Impact of Repealing the Section 199 Tax Deduction and Dual-capacity Tax Credit for Oil and Gas Producers,” Dr. Joseph R. Mason, September 13, 2010

[7] “Estimating the Tax Burden and Economic Impact from the Proposed “Gang of Ten” Revenue Offsets,” The Institute for Energy Research, September 2008

[8] “Regional and National Economic Impact of Repealing the Section 199 Tax Deduction and Dual-capacity Tax Credit for Oil and Gas Producers,” Dr. Joseph R. Mason, September 13, 2010

[9] “Estimating the Tax Burden and Economic Impact from the Proposed “Gang of Ten” Revenue Offsets,” The Institute for Energy Research, September 2008

[10] “Regional and National Economic Impact of Repealing the Section 199 Tax Deduction and Dual-capacity Tax Credit for Oil and Gas Producers,” Dr. Joseph R. Mason, September 13, 2010

[11] “Oil Industry Tax and Deficit Issues,” Congressional Research Service, p. 1, July 21, 2009

[12] “Energy Tax Policy: Issues in the 111th Congress,” Congressional Research Service,  p. 4-5, March 8, 2010

[13] “Congress’s Hugo Chávez Bailout Bill,” Wall Street Journal, July 30, 2010

[14] “Congress’s Hugo Chávez Bailout Bill,” Wall Street Journal, July 30, 2010

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