Truss’ Tax Cut “Fiasco”

UK Prime Minister Liz Truss withdrew her plan to reduce the Brits’ top tax bracket from 45% on annual incomes above £150,000 (roughly $169,000) to 40% amid a panicky self-serving outcry from the liberal Labourites and too many entrenched pseudo-conservatives among the Tories. The rest of her tax reduction and energy subsidy package seems to remain intact.

In the scheme of things politics, though, it seems to me that withdrawing that top tier tax cut is a small price to pay in order to get the rest of the tax cuts to pass. And it may be (though I frankly doubt it) that Truss deliberately overbid her tax cut package in order to allow herself be talked down a little bit to get to a package that could pass after her concession but that could not pass had she made her bid from the jump without the cut from 45%.

Regardless, the biggest error, and one that no one in Socialist Great Britain is decrying, is that enormous energy subsidy to businesses and households, ostensibly to help them pay for skyrocketing energy costs. Sure, the subsidy is supposed to be sunsetted after two years, but most of us know how well sunsetting works with subsidies.

Instead, the subsidies will serve only to maintain the current sky high energy prices to the end users and to consumers in all economic strata, all of whom must buy food, and housing, and transportation—all of which depend on energy.

The smarter way to reduce those energy costs would have been to push further deregulation of British domestic fossil fuel energy production and delivery. Truss is moving to allow fracking to resume, but that’s only a start.

Another Reason…

…to stop doing business with the People’s Republic of China—especially, stopping exporting American natural gas to that nation.

The Biden administration has been busily selling American, that is, domestically produced, liquified natural gas to the People’s Republic of China. LNG his administration sells there, mind you, isn’t LNG he can sell to the gas-strapped nations of Europe and Asia.

Selling energy to an enemy nation is bad enough, and it’s worse when those sales come in preference to sales of the same energy to our friends and allies.

The worst, though, is selling our energy to that enemy nation—the PRC—only to have that nation resell our energy to our friends and allies—the gas-strapped nations of Europe and Asia—at a steep profit for itself.

[PRC] companies that signed long-term contracts to buy US liquefied natural gas are selling the excess and making hundreds of millions of dollars per cargo. Buyers include Europe, Japan and South Korea.

For instance:

[The PRC]’s ENN Natural Gas Co is expected to profit from this trade when it sends the LNG tanker Diamond Gas Victoria to pick up a cargo of gas from Cheniere Energy Inc’s plant at Sabine Pass, LA, on the Gulf Coast on October 18, according to three industry sources.
Instead of dispatching the tanker to [the PRC]’s east coast, the vessel is scheduled to deliver LNG to Europe, they said. ENN is estimated to make a profit of between $110 million and $130 million on this one cargo shipment, analysts said, basing their calculations on market pricing data.

It’s true enough that the PRC’s resales to Europe and Asia are a drop in the ocean compared to those nations’ natural gas needs, but these are sales, and profits, that would be better done as a result of our directly selling our liquified natural gas to Europe and Asia, and at a lower cost, if only from cutting out the middle man. And from cutting out an enemy nation.