From the Heritage Foundation
Taxmageddon and its impact
A tsunami of tax hikes is set to hit the American people in 2013 if Congress fails to act. Here are some snapshots of how Taxmageddon affects the country, drawn from the research of The Heritage Foundation’s Center for Data
■ The Nation: $494 billion total tax
increase on all Americans
■ Families: $4,138 average tax
■ Baby Boomers: $4,223 average tax
■ Millennials: $1,099 average tax
■ Low-Income Workers: $1,207 average tax increase
■ Retirees: $857 average increase
■ States: $1,929 (WV) to $5,161 (CT)
range in average tax hikes per
■ Congressional Districts: $1,236
(NY-16) to $13,951 (NY-14) range
in average tax hikes per return.
These tax increases, which will hit every taxpayer in the country, will take effect on January 1, 2013 because the Senate hasn’t bothered to re-authorize the Bush Tax Cuts. To find out how badly they will affect you, please read the research done by the Heritage Foundation here: http://thf_media.s3.amazonaws.com/2012/pdf/sr-110.pdf.
These increase will have a negative effect on an economy that’s already hurting thanks to failed Democrat policies and they simply don’t care that you’ll pay even more than you do now. Americans can hardly afford more job killing government idiocy like this.
Obama thinks the American people are stupid. Throughout the debate, Obama regurgitated his talking points about a balanced solution to the debt crisis. In the process he insulted the intelligence of every voter by intimating that the budget can be balanced by eliminating a few tax credits. No, he didn’t commit to tackling the tens of trillions in unfunded liabilities to Medicare and Social Security. He declined to confront the ballooning cost of all the welfare programs. The only thing he wanted to discuss was eliminating a few tax credits for oil companies and corporate jets.
In May 2011, the Senate took up a bill to eliminate $2 billion worth of tax credits for the gas and oil industry. Let’s overlook their fallacious charges that these are unique handouts to the industry – and treat them as if they are expenditures. We are slated to spend over $3.6 trillion this year, yet Obama is obsessing over $2 billion in tax credits. Here are some of the major expenditures for last fiscal year, including the so-called handouts to big oil (in billions):
Yes, these tax credits barely register among our major ‘expenses.’
Using a 10-year budget frame, we are expected to spend another $46 trillion. Democrats claim that their plan to cut the oil tax deductions would save us $21 billion over 10 years. That amounts to .00045% of our estimated outlays.
What about the much beleaguered corporate jet tax deduction? That would save $3 billion over ten years – $300 million per year.
Mitt Romney rightfully lambasted Obama for overlooking the $90 billion in subsidies for green energy while focusing on a few billion in deductions he feels he could demagogue.
But there’s more to the story than just the dollar figure comparison. For Obama, a universal tax deduction to those who already pay a lot of taxes is a handout, while a parochial handout to a sectarian interest that pays no taxes is a tax cut. And the fact is that green energy companies have no tax liability. Perforce, their tax credits are nothing more than refundable handouts.
The green energy sector is even more parasitic when scrutinized by performance. Consider this chart detailing our energy usage by source for 2009; solar, wind, and biomass are barely on the map, even though they are almost completely subsidized. Here is a chart from the Institute for Energy Research comparing federal subsidies per unit of production of different energy sources:
As you can see, Solar is being subsidized by over 1200 times more than fossil fuels, while Wind enjoys over 80 times more in taxpayer cash. The reality is that no amount of subsidy can compensate for the impotence of green energy.
Moreover, while most of the government’s investments in green energy are in the form of direct subsidies, Oil and Gas companies don’t receive subsidies; they enjoy universal credits and deductions that are afforded to all businesses. Additionally, oil and gas companies pay an effective corporate tax rate about 55% higher than that of most other industries. All the while, the renewable-energy sector is ostensibly kept afloat by the taxpayer, offering nothing in terms of revenue.
Earlier this year, the Wall Street Journal laid out the facts about who pays taxes and who doesn’t.
The federal Energy Information Administration reports that the industry paid some $35.7 billion in corporate income taxes in 2009, the latest year for which data are available. That alone is about 10% of non-defense discretionary spending—and it would cover a lot of Solyndras. That figure also doesn’t count excise taxes, state taxes and rents, royalties, fees and bonus payments. All told, the government rakes in $86 million from oil and gas every day—far more than from any other business. [...]
Exxon Mobil, the world’s largest oil and gas company, says that in the five years prior to 2010 it paid about $59 billion in total U.S. taxes, while it earned . . . $40.5 billion domestically. Another way of putting it is that for every dollar of net U.S. profits between 2006 and 2010, the company incurred $1.45 in taxes. Exxon’s 2010 tax bill was three times larger than its domestic profits. The company can stay in business because it operates globally and earned a total net income after tax of $30.5 billion in 2010 on revenues of $370.1 billion.
Now let’s contrast that with green energy companies:
For comparison, nuclear power comes in at minus-99.5%, wind at minus-163.8% and solar thermal at minus-244.7%—and that’s before the 2009 Obama-Pelosi stimulus. In other words, the taxpayer loses more the more each of these power sources produces.
If Obama wants his green-energy campaign donors to be on equal footing with oil companies, maybe they should begin producing something useful and actually incur a tax liability before they receive tax credits.
Cross-posted from The Madison Project