How many of us have heard government officials say, more times than any of us can recall, how important it is to be independent from foreign oil, and how essential it is we move towards greener solutions to meet our energy needs? Well, a recent news account about a solar farm being taxed to death speaks volumes about how government talks out of both sides of its collective mouth.
In early 2010, following a government issued mandate to start moving towards other, greener forms of energy, a Michigan solar farm came on-line and exceeded everyone’s expectations by producing 225,592 kilowatt hours of electricity in its first year of operations. Unbelievably, however, the solar farm’s property tax bill also exceeded expectations when it came in at a whopping $27,689.00. The net effect, the solar farm owners are losing money, even when they get paid a premium price of 45 cents per kilowatt hour.
But there are other examples of our government being conflicted between its insatiable need for as much of our money as it can grab, while trying to move us towards a cleaner energy paradigm. Take Congress’ recent proposals regarding energy taxes which came in the midst of sharply rising oil prices and devastating nine percent (9%) unemployment.
Specifically, Congress is considering two pieces of legislation. One would cut many tax breaks for the five (5) largest oil companies (Exxon, Mobile, Shell, British Petroleum, Conoco-Phillips and Chevron) supposedly recovering $21 billion dollars in revenue for the government over ten (10) years. The other proposed legislation, would require, among other things, that the U.S. Department of Interior conduct lease sales in the Gulf of Mexico and off the coast of Virginia; and that it establish a timeline for reviewing pending off shore permit applications and extend leases in the Gulf and extra year.
IRS tax attorneys and many other concerned American taxpayers are asking whether anyone really believes we’ll be able to achieve independence from foreign oil by taxing solar farms out of business and by taxing big oil companies to the tune of $21 billion dollars (which all of us know will just be passed along to consumers anyway). And why is legislation needed to force Department of Interior to actually begin doing its job and consider current applications for more off-shore leases which have reportedly been sitting somewhere pending for longer than anyone might recall? It is this convoluted thinking, which is driven by conflicting political agendas that change with the next CNN poll, which has many tax lawyers suggesting government’s multiple personalities produce our an incongruent and unnecessarily complex system of taxes.
Tax attorneys point out there is one solution which gets a lot of lip service but little action, and that’s tax reform. That was also the conclusion of President Obama’s Debt Commission which said “tax reform should lower taxes, reduce the deficit, simplify the tax code, reduce the tax gap, and make America the best place to start a business and create jobs.”
At a time in our nation’s history when we clearly need to have a well thought-out and crafted tax plan which compliments rather than conflicts with our revenue, energy, and employment goals, we need leadership and the political will to set aside social, economic, and political differences and do what in the best interest of us all.
Segal, Cohen & Landis 9100 Wilshire Blvd. Ste. 601E Beverly Hills, CA 90212 (310) 285-3999