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February 23rd, 2012 
FAKE NEWS for the Zionist agenda Pete Sepp is executive vice president of the National Taxpayers Union.
Though many in Washington would deny it, taxing, spending, and borrowing are not the only ways federal policies can impact taxpayers and our economy. Regulating has become an expensive enterprise on its own. The Competitive Enterprise Institute’s latest Ten Thousand Commandments Report has compiled research estimating the total annual cost of federal regulations to taxpayers and the private sector exceeds $1.8 trillion.
How has this burden grown so large? One way is by hiding regulations affecting many industries in legislation that would appear to apply to just one sector of the economy. A case in point is the 2010 Wall Street Reform and Consumer Protection Act, also called the Dodd-Frank law.
The organization I serve, National Taxpayers Union, or NTU, raised many objections about the Dodd-Frank legislation, ranging from harsh interchange fee rules on debit card issuers to the impact the law (and other federal edicts) can have on start-up companies.
But one seemingly obscure part of Dodd-Frank is aimed not at banks or financial institutions; rather it is aimed at American energy. Section 1504 of the law would force oil and mining companies listed on the U.S. Securities and Exchange Commission to expand disclosure of payments to foreign governments while excusing foreign competitors.
[Read the U.S. News debate: Should the Dodd-Frank Act Be Repealed?]
What’s wrong with disclosure? Nothing, as long as everyone abides by the same set of standards. And here is the painful rub with Section 1504: In essence, the rule would give foreign competitors–largely state-owned oil and gas firms–access to information about what American companies are paying to governments overseas, enabling them to outbid and outmaneuver in the global race for energy resources.
This rule would also come with a hefty price tag, according to some industry compliance observers. American companies would be forced to report all payments to foreign governments–from large contracts to small projects. Combined with proposals to strip our oil and gas industry of tax-saving provisions, many of which are available to a variety of businesses, the new disclosure law would put America’s international oil companies (IOCs) at a sharp disadvantage against foreign rivals who won’t have to face similar barriers-to-entry.
Section 1504 was included in the final Dodd-Frank bill at the well-intentioned behest of Sens. Ben Cardin and Richard Lugar, who hoped that a new regime for oil and mining transparency here would help to ease the very real problem of corruption in the business dealings of governments abroad.
[See a collection of political cartoons on energy policy.]
But here again, the results may not be as satisfactory as supporters would hope–it is plausible to argue that some governments would decide to fully circumvent partnerships with U.S. companies in favor of deals with non-SEC-listed firms that would offer fewer “strings attached.” According to the Council on Foreign Relations, one reason China has been so successful in securing oil resources in Africa is that it has adopted a policy of “noninterference” and, reportedly, a penchant for paying bribes. If Section 1504 rules prove to further incentivize such behavior, then the well-being of economic liberty at home and in the rest of the world could actually be harmed rather than helped.
Still, the disclosure rules continue to have ample support from several organizations who dispute the “anti-competitive” argument, citing that most of the world’s IOCs and eight of the 10 largest mining companies are registered with the SEC. Yet, firms like ExxonMobil don’t even rank in the top thirteen largest global energy companies (as measured by reserves), which are all state-owned. In fact, over 75 percent of global oil resources are controlled by government-owned National Oil Companies, or NOCs, including Gazprom (Russia), China National Petroleum Corp., and Petróleos de Venezuela, who won’t have to comply with the rules.
American firms competing for scarce natural resources are already at a disadvantage, and this trend is projected to worsen. A recent Economist special report on “state capitalism” (an oxymoronic term if there ever was one) describes how the top-ranked NOCs are using their leverage and special treatment at home to expand their global reach. By contrast, American firms must deal with onerous and increasingly arbitrary U.S. tax policies, which make it more difficult for them compete on a global scale.
[Read the U.S. News debate: Is a Flat Tax a Good Idea?]
The United States has the second highest effective corporate tax rate of all Organisation for Economic Co-operation and Development countries, and proposals to repeal dual capacity (an essential tax credit that protects national oil and natural gas firms from being taxed twice on income earned and taxed abroad) would further undermine U.S. competitiveness in the energy space.
As with so many other federal regulations, the potentially adverse consequences of this SEC regulation deserve close scrutiny. At a very minimum, we must ensure that that new transparency and tax rules don’t undermine those SEC-listed companies who already comply with all of the U.S. legal requirements. Overall, a systemic revision of the whole tax code–and an equally systemic revision of regulatory policy, which the House of Representatives has initiated–would benefit our entire economy.
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—Read Mort Zuckerman on America’s Energy Future
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