William Shakespeare, through his character Juliet, asked "What's in a name?" Now, over four hundred years later, Americans are asking the same question about Senator Claire McCaskill’s Bipartisan Jobs Creation Act.
Unfortunately for Missouri residents looking for work, names aren’t always what they seem.
Sen. McCaskill’s bill has its bright spots, including extension of business tax relief and an initiative to make job-training programs more efficient. Unfortunately, the positives are more than outweighed by the additional burdens it will put on Americans through painful tax hikes. Among them are energy taxes fraught with adverse outcomes, such as higher gasoline and home heating oil prices.
The bill would eliminate widely-available tax deductions designed to help maintain overall US competitiveness in the global economy, but the clawback would only apply to certain American oil and gas companies. Repealing these provisions would give a leg up to oil and gas firms in countries like Russia, China, and Venezuela by cutting our domestic energy businesses off at the knees.
Jobs, revenue, and growth would shift to foreign based entities not affected by these tax increases, further eroding our international business standing in energy development. But the problems would extend beyond this sector.
America’s oil and gas industry supports more than 9 million jobs across all areas of the economy, 155,000 of which would be eliminated if Sen. McCaskill convinces her congressional colleagues to pass these new energy taxes. The Missouri labor force alone would lose nearly 800 jobs from these new taxes according to a study by Dr. Joseph Mason, a nationally-renowned economist at Louisiana State University. His analysis uses government modeling techniques to show that, in the first year, labor wages will decrease by over $16 million in the state, and total Missouri economic output will fall by $179 million.
This considerable damage is counterproductive to the apparent goal of the act. Nonetheless, the interconnectedness of the US economy, the spin-off opportunities created by energy production, and the demand for affordable energy mean that tax increases targeted at the industry would have widespread effects, even impacting Missouri.
So why author such harmful legislation? For one, it offers lawmakers the opportunity to tout another Washington-centric effort to boost jobs, even if the net results eventually prove underwhelming. Second, the oil and gas industry has historically been a politically-convenient target, even though those same lawmakers often forget about the jobs the industry creates and the unintended consequence of higher gas and heating oil costs for consumers.
Several of the ideas in the Bipartisan Jobs Creation Act are worthy of praise. But eliminating existing jobs in an attempt to create new jobs, through hitting the economy with punitive tax increases, makes no sense. If Sen. McCaskill would rethink the so-called “pay-fors” in her proposal, and focus more intensely on spending restraint, the measure would stand a better chance of living up to its name.