Washington Examiner, Looming Tax Hikes Threaten Gulf Economic Recovery, by Bill Dickens:

Will we ever see good news for the Gulf of Mexico region? [On the heels of Katrina and the BP oil spill,] new energy taxes recently proposed in Washington are ensuring that [the Gulf's recovery] future remains only a pipe dream.

Specifically, two new energy taxes being pushed by federal lawmakers would make our domestic energy companies less competitive globally and eliminate job promoting tax incentives at a time when we need them most. Both of these tax increases target only our oil and natural gas industry and, therefore, disproportionately undercut the welfare of costal states where energy exploration and production as a major source of jobs and the economy.

Consider first proposed changes to taxation on income earned abroad. Current ‘dual capacity’ rules grant American companies generating income overseas a tax credit to ensure the IRS doesn’t tax them for earnings on which they’ve already paid taxes elsewhere. For the past 25 years, Washington has maintained this sound tax policy to create an even playing field for domestic businesses in the global market. Yet, the proposed changes would penalize American-owned businesses, putting them at a competitive disadvantage against foreign competitors. That means that U.S. lawmakers would give companies like BP, who wouldn’t be subject to this kind of double-taxation, a leg up on domestic employers who will have fewer resources with which to compete. …

The second major proposal Capitol Hill is considering involves the repeal of a tax credit known as Section 199. Congress enacted the credit six years ago to provide an incentive for job growth among all U.S. manufacturers, from the auto plants in Detroit to film producers in Hollywood. Now, Beltway politicians are calling for a repeal of this credit for only our oil and gas firms. …

Though targeted at different sections of the tax code, these dubious proposals share a common consequence: more trouble ahead for our already troubled Gulf community. …

With the anniversary of Katrina, it’s important to remember that the Gulf region has been hit by a natural disaster in Katrina and a manmade disaster with Deepwater Horizon. Now a Washington-made disaster in the form of energy taxes threatens these same businesses and families already struggling as well as our national economic stability.