Taxes and Texas

Here’s a subject that will send most of you to the delete button...taxes, specifically taxes and fairness. Before I begin this particular sermon I probably should declare my biases. I am an old school budgetary hawk. I hate deficits and deficit spending. I am for lower taxes, a far more simple system than the one we currently employ, and in general would prefer that people get off the public dole. For someone who believes these things, the current environment of trillion dollar spending sprees coming out of Washington feels like a horror movie. Indeed, the past decade has seen our National debt double to a mind-blowing 22 TRILLION dollars. It is incomprehensible.

But here’s my problem, it’s difficult to talk about our national finances without it turning into an austere and arrogant put-down of recipients of welfare. While the welfare apparatus in this country is a hot mess of disincentives and unintended consequences that is in desperate need of top to bottom reform, at least it has the noble intention of trying to help...individual human beings navigate the sometimes catastrophic vagaries of modern life. What really sends my blood pressure skyward isn’t the existence of welfare cheats. What turns me into a raving lunatic is the welfare that gets thrown around to rich people and insanely profitable corporations. Although I could choose among literally thousands of examples to illustrate this outrage, lets just talk about energy and the state of Texas.

Thirty years ago The Texas legislature unanimously passed an enormous tax break and subsidy to the oil business, the natural gas business to be precise. Back then these natural gas wells were considered difficult and chancy propositions and very hard to develop. What was needed, argued slick lawyers for the oil industry was to slash the tax on natural gas wells. The bill was passed unanimously. Back then Texas only got around 3% of its gas from natural gas so the “cost” of this tax giveaway to the Texas treasury was insignificant. Then fracking technology revolutionized the extraction of natural gas to the point where today 61% of all gas produced in Texas is natural gas. But guess what? That tax break is still on the books and costs each Texas family $169 dollars a year.

With delicious irony, last week lobbyists from the Oil Business started their whining campaign against subsidies for the renewable energy business being debated in the Texas legislature. 

What the actual hell???

I thought the business community was against planned economies? I thought conservatives were against the government trying to pick winners and losers in the free market?? No, big business is fine with government subsidies for themselves, just not so much for their competition!

Of course, this mess only exists because of a 500 million page tax code that gets mined for freebies 24/7 by expensive lawyers for the well connected. A flat tax with NO DEDUCTIONS for ANYTHING would wipe out all the cronyism overnight...but that’s an argument for another day.

So, by all means, lets reform welfare. But how about we start by kicking the Oil Business off the public dole?