Raise Taxes, Hurt the Economy
Posted May 9, 2011
"More taxes would do nothing to lower prices," Brian Johnson, API's senior tax advisor, said at a press briefing Monday. "They would not affect the global economics underpinning oil supply and demand, which explain today's gas prices. They would, however, hurt the economy by reducing energy investment and the new jobs that would flow from that investment."
Johnson was joined by leaders from Americans for Tax Reform (ATR), the U.S. Chamber of Commerce and the Small Business & Entrepreneurial (SBE) Council, and talked about the potential effect of current tax proposals on business, jobs and gasoline prices.
"Politicians are using tricky language when they talk about tax policy," said ATR Director of Tax Policy Ryan Ellis."The fact is that these are deductions and tax credits that all businesses receive, not special carve outs for one industry. Deductions mean companies are keeping their own money and are able to make future investments that benefit retirees."
Higher taxes would affect the owners of energy companies - nearly 100 million people whose 401k plans, IRAs, mutual funds and pension plans include oil and natural gas investments. These and institutional investors like colleges and universities own nearly 99 percent of the value of America's oil and natural gas companies.
"Lawmakers are trying to pick winners and losers with these tax proposals," said U.S. Chamber of Commerce Chief Economist Martin Regalia. "We really need to look at why the government wants to increase taxes on energy companies. These taxes could reduce supply and increase prices at a time when the government is desperate for money. This is not the kind of tax increase we want to see right now."
SBE Council President and CEO Karen Kerrigan said many small businesses would feel the effects of higher prices immediately, decreasing their ability to aid in economic recovery.
"Small businesses rely on these energy companies for their livelihood," Kerrigan said. "Small businesses need to create jobs to ensure long-term economic recovery."
Johnson said the oil and natural gas industry supports nearly 9.2 million jobs and that increased access to America's resources can provide more government revenue and jobs than increased taxes.
"There's one really easy thing we can do to bring in revenue: that's increase access," said Johnson, noting that the oil industry currently pays about $87 million a day in taxes to the Treasury. He said letting oil and gas companies drill more would result in about $140 billion more in taxes in 20 years.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.
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