Markets, not government will bring us energy independence

See my response to this week’s National Journal topic “Gas Price Conundrum” moderated by former Michigan Governor Jennifer Granholm. Lawmakers seem to forget the laws of market economics and that U.S. oil producing firms are “price takers,” not “price makers” in a global market. They are not members of the price-fixing body, OPEC, whose oil production decisions are made, at least in part, collectively, and heavily influence the world market supply. Oil and gas companies are already investing in identifying and producing new energy sources, spending hundreds of billions over the last 25 years on new supplies of oil and natural gas. These investments are outpacing earnings by these companies. Rising oil prices encourage companies to invest more in finding new reserves and to increase production from existing fields. Yet, lawmakers still want to punish them by removing the deductions that many other sectors of the economy enjoy. Increasing taxes on oil company revenues will only reduce the desire and ability of firms to find and produce more oil. One of the axioms of public finance scholars is that if you tax something, you get less of it. The auto industry is already making great strides in making autos more…

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Chairman Ryan Addresses Special ACCF Forum with Business Leaders

Business leaders and trade association executives from a broad spectrum of industry sectors, investors and members of the media were in attendance at an exclusive, invitation-only ACCF forum to hear House Budget Committee Chairman Ryan’s views on deficit reduction, tax reform and economic policy in the current congress and beyond. I shared my thoughts on tax reform and debt reduction with Ryan at the event. Washington Columnist Michael Barone noted: Ryan spoke at a breakfast this morning at the Phoenix Park Hotel sponsored by the American Council on Capital Formation. In an impressive speech delivered without visible text Ryan argued that “government activism” is holding the economy back and that “four foundations for economic growth” are being ignored because of (1) out-of-control spending, (2) “a regulatory state untethered to reality,” (3) “enormous uncertainty” about tax rates and (4) lack of sound money.

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Repatriation is a free stimulus bill for taxpayers

I recently explained to The Tennessean how repatriation can benefit our economy at no cost to taxpayers… Supporters of the corporate holiday — something akin to the tax-free, back-to-school shopping weekends that Tennessee and other states routinely sponsor — say it would help the federal government collect at least some taxes on money that would otherwise stay offshore. Margo Thorning, chief economist at the American Council for Capital Formation, called the tax holiday idea “like a free stimulus bill — money that we wouldn’t see otherwise…” U.S. Treasury officials had said they would only consider letting U.S. companies pay a reduced tax rate on profits earned overseas as part of a broader overhaul of the U.S. corporate tax code. Even tax holiday proponents — such as the American Council for Capital Formation — say something should be done longer-term about corporate tax rates in the United States. Thorning, the economist who speaks for that pro-business group, argued that U.S. taxes on businesses are higher than in any other industrialized country except Japan. “As long as our tax rate is so much higher than other countries, companies are unlikely to bring offshore earnings home — especially in today’s uncertain environment about…

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