Raising taxes on the oil industry will hurt the economy

As Congress and President Obama work towards a deal in addressing the current debt and budget, there have been demands to raise taxes on the oil industry. Obama said that there would be no negotiation on the debt deal, unless there are tax increases on these companies.

With the tanking economy, in addition to the high unemployment numbers, one would think Obama would want to address these issues, instead of making them worse. Raising taxes on the oil industry could have a detrimental impact on the economy, as well as causing unemployment numbers to rise.

Currently, the oil industry pays more than $86 million per day to the government. In a recent interview, Louisiana State University economist Joseph Mason said that removing tax incentives on oil companies could cost the government more over time and even suggested that Obama and Congress should ease the restrictions on offshore drilling to help boost revenue.

“The proposed revisions . . . are expected by the Treasury to raise approximately $30 billion in federal tax revenue over the next 10 years. But this comes at the expense of industry cutbacks that can reasonably be expected to cost the economy some $341 billion in economic output, 155,000 jobs, $68 billion in wages, and $83.5 billion in reduced tax revenues. The net fiscal effect — a loss of $53.5 billion in tax revenues — suggests that the policy proposals exacerbate, rather than alleviate, the federal deficit.”

With tax increases on the oil industry, unemployment will also rise as well. Currently, the U.S. has an unemployment rate of 9.1%, and in some areas of the country, it is much higher than the national average. Currently, unemployment rates are lower in high energy production areas. For example, North Dakota has 3.3% unemployment rate. In areas with low energy production and with the capability to be high energy producers (especially if offshore drilling were permitted), the unemployment rate is much higher. While Virginia has a 6.1% unemployment rate, Florida has one of the higher rates at 10.8%. [Source]

Instead of raising taxes, shouldn’t there be a push to allow offshore drilling to help boost the economic revenue? According to a recent Energy Tomorrow post, offshore drilling would produce 190,000 new jobs and generate billions in economic growth.

Increasing taxes is not the answer to addressing the deficit. Cutting unnecessary government programs and stopping the spending are the solutions. President Obama and Congress should embrace this solution to get the economy back on the right track.

Сейчас уже никто не берёт классический кредит, приходя в отделение банка. Это уже в далёком прошлом. Одним из главных достижений прогресса является возможность получать кредиты онлайн, что очень удобно и практично, а также выгодно кредиторам, так как теперь они могут ссудить деньги даже тем, у кого рядом нет филиала их организации, но есть интернет. http://credit-n.ru/zaymyi.html - это один из сайтов, где заёмщики могут заполнить заявку на получение кредита или микрозайма онлайн. Посетите его и оцените удобство взаимодействия с банками и мфо через сеть.