Baucus' tax reform legacy shaping up poorly for Montana

Sen. Max Baucus has one major piece of unfinished business he’s scrambling to complete before he officially leaves office. Last year, he took on the mammoth task of completely overhauling our nation’s tax structure — an undertaking that is sorely needed to help our economy and create jobs. Moreover, comprehensive tax reform is the senator’s last best chance to repair his legacy after being sullied by his role in crafting Obamacare.

Unfortunately, it’s looking like Sen. Baucus’ tax legislation might turn out to be another poor mark on his report card and further degrade his popularity.

A faction of Congressional Democrats is pushing major tax changes aimed squarely at damaging our energy industry. That would have an immediate, negative impact in Montana where our job growth has been dependent, in large part, on the booming oil and gas development in Eastern Montana.

But eliminating energy jobs is exactly what environmental groups like the Sierra Club would love to see result from changes to tax policy.

We often hear rhetoric about “subsidies” received by traditional fossil fuel companies. Those claims are blatant mistruths. To be perfectly clear, there are no government subsidies for oil and gas producers. Certainly nothing like the government payouts received by companies involved in generating solar or wind power.

When Washington, D.C. politicians talk about eliminating “subsidies” for oil and gas companies, what they’re really talking about are the type of basic tax deductions that firms in every industry receive to account for the cost of doing business. The truth is, they’re proposing to single out petroleum producers including those in Montana, by eliminating standard tax practices almost all other manufacturers receives.

If that happens, American energy producers will be less competitive and have fewer resources to create new jobs.

It would also drive up the cost of energy at all levels. That’s bad for consumers, who will face higher prices for gasoline, electricity, and home heating, to name just a few items. It’s also bad for energy-intensive industries, like agriculture and manufacturing.

But again, higher prices for energy is exactly what some environmental groups would love to see. They’d rather Americans pay artificially higher prices in order to make the heavily-subsidized alternative energy sources marginally more competitive.

The anti-worker, anti-consumer agenda of the environmentalist movement has no place in our tax code. It would distort our economy, inflate prices, and ultimately cost us thousands of jobs.

But these types of policies are receiving actual credence by some members of Congress, and these policies have worked their way into the legislation discussion drafts being circulated by Sen. Baucus and his staff.

There is no doubt that tax policies singling out the energy industry would have a disproportionate impact on Montana where energy is such a large part of our export economy.

Hamstringing industry is certainly is not the legacy that most of us are hoping Sen. Baucus will leave our state.

But Sen. Baucus still has time to set things right by showing leadership among his Democratic caucus in the Senate. He needs to establish fairness and equity as key tenants of tax reform. He needs to emphasize that tax reform absolutely should not result in some industries gaining at the expense of others as a result of inequitable policies.

At the very least, the tone Sen. Baucus sets now will be valuable guidance for whoever succeeds him in office. Because energy is such an important area of Montana’s economy, our state’s Congressional representatives will be in a pivotal role to shape energy tax policy as part of the reform package.

It’s unfortunate that Sen. Baucus has to leave office before he is able to see his final, major policy objective completed. But he still has ample time to have a significant influence on the outcome for tax reform. The senator should make sure Montana’s priorities are protected by supporting fair tax policies across the board and not harming one of our most valuable industries.

Rep. Duane Ankney, R-Colstrip, represents state House District 43 and is the chairman of the Montana House Appropriations Committee.