Democrat Tax Code Changes Defies Rational Behavior

What's new? Democrats are clueless and worse, destructive to our society and nation as it was founded. The average citizen has no idea what the democrats are doing by trying to destroy our energy system that provides more then 90% of all our energy.

How do they expect us to survive?

Their overall plan to completely eliminate all fossil and nuclear energy sources and replace them with 'clean energy' sources like wind, solar and biofuel is insane Yet, as group, a collective, the democrats continue to push forward with more proposals that will ensure our demise.

Truly, the democrats live in a different world, one where common sense and reality is of no consequence. The only way to understand this irrational behavior is to understand they have a different DNA then the rational among us. Their chemical makeup portends their inability to make rational decisions that demands understanding the consequence for those decisions. History is riff with examples of democrat irrationality.

If you need further example of this DNA mutation, look no further then the Russians have just told us to pound sand in Syria and Iraq, and it appears they have and they can given our leader is a progressive liberal socialist democrat.  

Is this a problem for the voting public, maybe not. Only time will tell if we have enough rational citizens left to make the right decision.

Playing Favorites with the Tax Code
Source: Scott Greenberg, "Senate Democrats' Bill Would Overhaul the Treatment of Energy in the Tax Code," Tax Foundation, September 25, 2015.

September 30, 2015

 Earlier this week, Democrats on the Senate Committee on Energy and Natural Resources released the American Energy Innovation Act, a 437-page bill aimed at promoting clean energy and improving the country's energy infrastructure. About 100 pages of the bill are devoted to rewriting several sections of the tax code that deal with energy.

 The bill would simplify the treatment of energy in the tax code. The new clean energy credits are technology-neutral. The bill uses performance-based standards to compute tax credits.

The bill implicitly sets a price on carbon emissions mitigation.
The bill would continue to subsidize the production of energy.
The bill would discourage investment and jobs in the oil and gas industries.

Under an ideal tax code, businesses would be able to deduct all investment expenses as they occur. In practice, the federal tax code has dozens of depreciation schedules for different investments, which require businesses to deduct the costs over several years. The longer businesses are required to deduct the costs of investment, the more harmful for growth and investment.

The Senate Democrats' bill would force oil and gas companies to spread out the costs of drilling over a longer period of time, harming investment and moving further away from an ideal treatment of capital expenses.

If the government wants to encourage clean energy through the tax code, clean energy companies should be allowed to fully expense their capital investments. Full expensing would prevent companies from being taxed on income that does not yet exist and would encourage investment and growth.