Buzz words such as “subsidies” and “loopholes” have been thrown around by politicians for decades. If you’re seeking to impose punitive financial policies, these words are certainly more appealing than terms like “tax” or “penalty.” The Obama Administration is currently pursuing tax increases on the oil and gas industry under the guise of ending accounting loopholes.
But let’s take a look at the facts. Between 2007 and 2012, the oil and gas industry paid an effective tax rate of almost 45 percent — compared to the healthcare industry which paid about 35 percent, and pharmaceuticals which paid around 21 percent.
The president keeps talking about everyone paying their “fair share” but the oil and gas industry created 148,000 jobs in 2011 and currently injects $10.4 million in government revenue every hour.
According to the American Energy Alliance, selective repeal of provisions such as those contained in the “Close Big Oil Tax Loopholes Act” would cost the U.S. economy up to 637,000 jobs and reduce U.S. household earnings by nearly $35 billion over the next ten years.
But even more than that — it is unfair and un-American to single out an industry for arbitrary tax hikes.
If the president is serious about his support for more domestic oil and gas development, it’s time that his policies actually try to accomplish those stated goals.