According to Sepp (2014), the American tax code is outdated. The reform package has taken so long than necessary. One of the setbacks that have hindered the reform agenda is politics. It is apparent that political will has never been sufficient in the call and execution for the much-needed reforms. Nonetheless, there is a likelihood that the new grounds being put in place now will yield positive outcomes in future. The current reform agenda on tax laws has serious weaknesses that must be fixed before major steps are made.
Throughout the article, the authors revolve around the desire to push the conversation forward bearing in mind that it is long overdue. If the White House budget can be updated to match the current fiscal realities, the punitive tax policies can finally be amended to the benefit of the American public. In addition, politicians should be compelled by law to understand that politics and tax reforms are two separate entities that must be distinguished at all times.
The energy sector is the latest target in the proposed White House budget by the Obama administration. The blueprint appears impressive and practical since it has taken an alternative path from the past. The past budgets and tax laws mainly sought uniformity at the expense of the common person (Sepp, 2014).
As it stands now, one of the highly tasked sector is that of oil and gas. The taxpayers are apparently being forced by some in Washington to affirm otherwise. If indeed the energy sector will still be targeted for more tax collections, then politics must be blamed for the occurrence. It is not only the energy industry that can be taxed in the vast US economy (Sepp, 2014). There are several businesses that have never known fairness when it comes to taxation regimes. Whereas there are attempts to seek further deductions in the cost of drilling oil and gas, a number of business organizations will find themselves at cross roads due to the punitive tax policies. The President’s scheme is not considerate at all because it does not bear in mind those who will suffer when the oil and gas sector is additionally taxed.
Any sound economic policy cannot support such cost recovery measures and creative mislabeling. In any case, the energy sector is already under a huge burden of high operational expenses. As a result, the cost of doing business in this sector is extremely unbearable (Sepp, 2014). Worse still, reliable investors in the sector can hardly step their foot in the industry owing to prohibitive costs of running business. The situation is worsened by the introduction of new taxes. The long term financial outlook in several other sectors may also be dismal since all sectors of the economy depend on energy supply either directly or indirectly.
Any slight increase of tax in this industry is sharply reflected in the entire economy. As much as politicians and policy makers are aware of these negative impacts, nothing is being done to correct the mess. Severe proposals to tax a single sector and our arcane tax code have been largely simplified by the political elites even though the issue at hand is serious. A state of worry has also gripped other taxpayers because they are not sure if they will be next targets of the taxman (Sepp, 2014).
Reference
Sepp, P. (2014). Obama’s Tax Policy Is Stuck in the Mud. Web.