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Guess What, Mr. President?


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guess-what-mr-presidentAmerican Spectator:

Virtually from the day he took office, President Barack Obama has railed against the oil and gas industry, arguing it's not paying its fair-share of taxes. Each of his budgets has called for hiking the industry's tax bill by at least $4 billion annually through removing unwarranted "subsidies." He and his anti-carbon true believers want to use these captured revenues to double-down on renewables in pursuit of the President's clean energy agenda.

 

Unfortunately, President Obama, as well as many other politicians and the media, uses the terms subsidy, tax preferences, deductions, incentives and loopholes interchangeably, implying there is something inherently unjust about the tax code. In fact, the 13,000-page Internal Revenue Code is designed not only to raise revenue but to induce individual and business behaviors that are deemed beneficial to society or the economy.

 

For example, home ownership is encouraged through the deductions for mortgage interest and local property tax payments. Personal saving is boosted through provisions that permit tax deferrals on current income deposited into IRAs and 401(k)s. And the tax code contains hundreds of provisions to encourage businesses to undertake certain desirable activities, such as the search for energy resources.

President Barack Obama says it's time to remove the huge and unnecessary subsidies to the oil and gas industry. But the industry doesn't actually receive "subsidies." What it does receive is access to the same "deductions" that are available to most corporations. Simply put, deductions from gross revenue allow businesses to write off legitimate expenses incurred in the production of that revenue to ensure that taxes are levied on net income.Scissors-32x32.png

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