Raising taxes on the oil industry will hurt the economy
By Krystle Weeks | Tuesday, July 12th, 2011 | Energy independence, PolicyAs 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.
Tags:
Contribute for Conservatism!
Share this post
About the author
Growing up in Maryland typically does not yield a Republican. Fortunately, Krystle Weeks was one of the lucky few booted to the Commonwealth for her staunch conservative views. From an early age, she has been debating politics, and since 2006, she has been involved here in the Commonwealth helping Republican candidates to victory. Aside from politics, Krystle is a runner and a dynamite cook. You can email her here. Krystle also blogs at Crystal Clear Conservative and Charm Offensive Cooking.
We're 75% there! Thank you to everyone who has so far contributed! Just $2000 to go!
Comments
10 Responses to "Raising taxes on the oil industry will hurt the economy"
The Repubs (along with Al Gore) on the other hand feel that everyone spending more on worse and worse light bulbs will help create jobs (in China).
Is your title a statement or a question? WIthout the question mark, it is a statement. Then you add the “?”
as if you don’t know what you are talking about. Such a girl thing.
Since when is closing subsidies and loop holes a “tax increase.”?
This is like saying when a school board pays off a bond, but wants to exend its credit, they call it a ‘no tax increase bond issue.” It is really a no tax decrease for the property owners who pay it. Oh, I wish the Tea Party would get their priorities straight here.
Krystal: To clarify. Your article is titled:
Why Raising Taxes on the Oil Industry will hurt the economy?
You flunk English 101 here. You either make a statement and make a case, or you ask a question and debate it with inteviews.
The title should therefore be one of the following:
Why Raising Taxes on the Oil Industry will hurt the economy.
No question mark. make your case. Or
WILL Raising Taxes on the Oil Industry will hurt the economy?
An easy change of words from “WHY” to “WILL.”
I hope this helps you in your future rhetorical and writing skills. So far, you get an “F”.
P.S. You may or may not have made some valid points in your text, but if the headline is so flawed, I don’t read past it.
Oh, and thak you Kystal, for the canned talking points form the oil lobby in DC. Really refreshing. Not.
Get a life, Craig. Four critical comments? Really? It’s also “Krystle” – not “Krystal” and not “Kystal” – so you flunk Reading and Writing 101. Valid point on the question mark. I’ll take care of it.
Up till recently I had a little bit of money invested in BP so I think I can serve as an honest opinion on the need for oil subsidies.
While many of the subsidies enjoyed by the oil industry are no more then other manufacturing and mining industries enjoy, there are some special tax breaks available that only the oil industry enjoys. It is my opinion that the oil industry does not need any special tax breaks to motivate them to explore for and extract crude oil while the price per barrel is as high as it is today.
For what it is worth, I recently cashed out all my holdings in the stock market due to my concerns about the brinkmanship being exercised in Congress with the debt ceiling. There is too much risk of loss of earnings if a deal is not realized.
I would suggest that there needs to be a graduated royalties payment based upon the price of crude oil. When the price goes up (and it will over time) the percentage of royalties should go up.
It is ironic that the headline should be…”Not raising taxes on gas will ruin the economy”. Fact is, the failure to maintain our transportation infrastructure poses the gravest threat to our economy. Just yesterday, Secretary of Transportation Sean Connaughton admitted that he can no longer maintain the Commonwealth’s transportation infrastructure and will recommend turning those responsibilities to the cities and counties. In the House, republicans are pushing to cut federal money to the states, money which McDonnell counted on to pay back anticipation notes. Smoke and mirrors, but those paying attention know the negative effects of Norquist’s no tax pledge, especially on roads, bridges, highways, and tunnels. For all those who advocate for enforced extreme austerity, you are soon to be inunated by unintended consequences. For Shaun Kenney, how will you raise the revenue to maintain the county’s existing roads, much less build improvements, when the Commonwealth exists its responsibilities and throws them on you?
“Raising taxes on the oil industry will hurt the economy”
Seems that the crux of your argument is one of “removing federal dollars from the oil industry will have anegative effect on the economy because the oil industry will have less money to spend.” In these terms, cutting federal stimulus spending will also hurt the economy. So you would argue it should not be done. It is, of course, an absurd argument – though not surprising.
But at least you did not try to argue that it will lead to higher gas prices – another absurd argument though it is surprising you did not try to make it.
Fact of the matter, the oil and gas industry will invest in ANY place they can possibly extract oil or gas (google Marcellus Shale for example) at a profit. At current high crude prices (and even the very low natural gas prices, removing tax incentives will not stop them from producing their product for which demand continues to rise.
Your argument is like saying that if I make record profits on making my coffee cups (say 25% margins or more) while the government pays me another 10% to continue to make them and my coffee cups are in high demand, I will stop making coffee cups if the government stopped paying me that extra 10%. Nothing could be further from the truth. The oil industry is not a marginal enterprise these days.
Eric–BRAVO. I did indeed flunk my English 101 with reply to Krystal aka JK but for Lord’s sake, is the Republican Party so devoid of leadership and ideas these day that the best then can do is hide under the cover of “no tax increases” after decades of bitching about tax loopholes? Where has this party gone? Better question: Where is the party going? Down the tubes is the best call I can make.
Leave your response