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Archive for May, 2013

How to Talk About Israel’s Recent Strikes in Syria

May 6th, 2013

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Israel carried out several limited strikes in Syria over the weekend, raising the possibility of an expanded Syrian civil war. Here’s how to talk about it:

1. Israel was responding to a real, imminent danger to its security.

U.S. and Israeli sources indicated the Israelis late last week struck a shipment of sophisticated, Iranian-built Fateh-110 missiles bound for the Lebanese terror group Hizbollah. The Syrians also claimed Israel hit the Jamraya military complex outside of Damascus this weekend, which U.S. officials say is Syria’s chemical weapons development center.

If Hizbollah obtained the Fateh-110 missile, the terror group would then be able to accurately deliver a half-ton warhead with a range of 185 miles, which could strike almost all of Israel’s major cities and military bases. Israelis living in Jerusalem, Tel Aviv, and other population centers would find themselves in Hizbollah’s crosshairs. These missiles could travel father and hit a target much more accurately than anything currently in Hizbollah’s arsenal. This was a real, imminent danger to Israel, and its leaders acted to mitigate the threat.

Given the serious threat these weapons pose to Israel’s civilian population, we should stand with Israel in its efforts to blunt the threat from Hizbollah.

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MLP Bill, With or Without Tax Reform

May 1st, 2013

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Comprehensive tax reform is long overdue, but it’s also going to be difficult and may not happen during this, or even the next, session of Congress. In the meantime, we can’t hold up other tax code fixes, especially in vital areas, such as energy. The MLP Parity Act, a fix to our unequal tax code, shouldn’t be delayed just because it doesn’t fix all of the problems with our current tax code.

As it stands now, the government is implicitly telling investors what to invest their money in. Master limited partnerships are attractive investments, passing profits through to investors without being taxed at a corporate level. This appealing financial structure draws in more capital and lowers the cost of capital for projects owned by an MLP. Unfortunately, under our current tax code, qualifying projects are generally oil and gas related – pipelines, extraction, refining or exploration – excluding many types of energy, from biomass to nuclear to wind. As a result, a project such as a wind farm is less attractive to investors and must offer a higher return than a comparable natural gas project.

This bias in the tax code unfairly picks energy winners and losers, incentivizing the types of energy projects that were common in 1981 when master limited partnerships were first created. Although our fuel supply has changed, the tax code has not, leaving clean energy out of the investment pool. While it may not fix all the inequity in our arcane and complex tax code, the MLP Parity Act is a much needed first step towards an even playing field for our energy future.

This piece was originally featured in National Journal.