Energy Independence: Government Should Neither Inhibit Nor Subsidize Any Type of Energy

by Ron Paul

As the economy continues in its downward spiral and talks in Congress about reducing spending have only amounted to political theater, the subject of how the tax code treats energy has become a topic of controversy. Specifically, should we subsidize, enforce mandates, or give tax credits and deductions to industries like ethanol and natural gas? Having a thriving energy market domestically is a good thing and something the government should not hinder. Not only would decreasing our dependence on foreign oil simplify our foreign policy, but it would greatly enhance our anemic economy at home.

Of course, the government should neither inhibit nor subsidize any particular type of energy. While many people agree with that statement, there is much confusion over the difference between government subsidies and tax credits or deductions. The difference is night and day, yet so many times they are all lumped together as evil government handouts. A subsidy IS a government handout. It amounts to the government taking money from the people and giving it to a favored interest. It is the worst sort of market manipulation and it is something I can never support. This kind of government mischief is anathema to the Constitution and the principles of freedom and the free market.

By contrast, with tax credits and deductions, industries, business, and individuals simply get to keep more of the money they have earned. Ideally, the tax code should not be used for social engineering, but, until we have true tax reform, I will always support tax credits and deductions that keep more dollars in the private sector where they are spent, saved, or invested. This means I will support tax credits and deductions for energy producers, farmers, homeschoolers, family child care expenditures, expenses of evacuees from disaster areas, and even adoption expenses. I’ve almost never met a tax cut, deduction, or credit I didn’t like. Any measure that keeps money in the private sector to spend, save or invest, rather than allowing the government to waste or misallocate is a win for the economy.

Inequities in the tax code dealing with tax credits should be solved by giving all participants equal treatment. Removing

I oppose ethanol mandates because I do not think anyone should be forced to use or buy ethanol. Ethanol mandates often serve as corporate welfare for big agriculture ethanol producers. The marketplace should decide whether or not to use ethanol, and producers of ethanol have to discover if they can produce it at a price that makes good business sense. No industry should be allowed to use legislation to create a “market” for its products. The real reason ethanol mandates continue to surface in federal legislation is that agribusiness continues to have one of the most powerful lobbies in Washington.

Furthermore, while I do not support providing federal grants to any industry, I do support the tax credits contained in the NAT Gas Act, HR 1380. These credits reduce taxes for the production or purchase of vehicles that run on American-made natural gas. These credits are not subsidies. Of course, we should repeal federal barriers to energy production and reduce taxes on all forms of energy. Therefore, I have also introduced the Affordable Gas Price Act HR 1102 which would remove governmental barriers to offshore drilling, encourage private investment in new refineries and suspend taxes on gasoline when the price at the pump reaches a certain threshold. Lowering taxes to encourage the domestic production of energy and getting government out of the way of the American energy market is not a government giveaway; it is the way it should be in a free country.


  • ChristianWorldOrder2

    you people need to vote for him in 2012! better wake up and forget about obama aka one big ass mistake america and look at this man for the real “CHANGE”

  • CristiClujeanul

    I just hope that u are not going to change your mind and start some new war…american tradition.

  • salsa20

    Look into the RODIN Coil people. Its the cure to are problems we have today for free energy and a whole lot more. LOOK IT UP!!!!

  • anoldcrow

    awesome, i also like the way you been getting more aggressive in interviews, it suits you, your modesty is becoming but we fans want to see the fire in your belly we all have. also good luck to you and barney frank, your even making waves here in taiwan, if you check out /watch?v=5qaK8Wc_IO8

  • Maxxsgirl

    I think that small businesses who convert to renewable energy should get dramatically reduced taxes. They will lead by example, all will follow and then non will have to pay stupid high small-business taxes : )

  • mrgeestacksalot

    RP 2012!!!

  • PullTheTricker

    Governmental, govern-mental.

    Wake up!

  • shonkhuulai

    He is the one.

  • neoplasmax


  • RailRoadCar9

    We need to Stream line The Regulation on Energy Related, Cut the red Tape & Permit Fees, Strip them of the ability to use energy to strangle us, For example there shoving this green Energy on us in the name of saving the planet yet with excessive regulations & Permit fees there preventing most of us from doing solar or wind, it cost more in permit fees to build & install a 1.5k turbine then it costs in Material to build it & Labor to install it ,

  • TruthConsciousness

    The word “government” needs to be abolished as a descriptor for the protector of the people. The very idea that a free nation have government is absurd. We simply need to rename it from something that’s inhibiting and controlling to something that’s liberating and protecting.

  • mjones07

    Paul v NWO

    Go Ron go!

  • bigmancoolguy

    “no man can lead man, we have to have unity”
    bob marley. one love . DR RON PAUL 2012

  • jjcale1111

    Sorry Ron, the distinction between subsidies and tax credits is sophistry – this is the first thing that I disagree with you on.

    The playing field should be level for all players and all industries…. anything else is picking winners.

    • Libertarian777

      Overall you are correct they are one and the same. The distinction though is the intermediate step of taxation of one to give a subsidy to another. If you removed the tax, there is no need for a tax credit. Additionally without taxes there are no funds to subsidise someone else. He even states that tax credits are not ideal but that he will always vote for lower taxes. Ideally there should be neither a tax, nor a tax credit or subsidy. Ron paul’s message is changing slightly. Jot because his ideology is changing, it’s just that he’s gathering more steam for his run at the white house this time around, and his message is becoming a lot more pragmatic than pure ideological discussions as before. A good example is social security. While he doesn’t quite believe in it, he’s willing to have a transition period, where soc sec can be funded by the reduced foreign aid we give. Also he spoke of a flat 10% income tax. Again ideologically he would have 0% tax, but practically 10% would be a starting point

  • StewMag00

    Keep Fighting for Liberty Ron! We need a change from the status quo, You are my president, and ill support you every step of the way!

  • ToxinalX

    Please don’t forget the moneybomb on ronpaul !

    >> Ron Paul 2012 <<

  • smashbeans

    hails to the american farmer!

  • latlanticcityphil

    Thanks Bro. Ron Paul 2012 for the truth & common sense.

  • vierge99

    Common sense and intelligence in a Presidential candidate. He’s got my vote!

  • BboyJJUniOR34

    Ron Paul!!! <3