American Energy – And Tax Fairness

Mark Green
Posted April 10, 2013

American Energy has been a positive story these past few years, thanks in large part to big innovations, and big investments made by America's oil and natural gas companies.  Thanks to America’s energy revolution, domestic oil production is higher than at any time in the last 20 years,  and net imports are at a 20-year low.  Meanwhile, natural gas production is at an all-time high, increasing our energy security and lowering emissions.  All while the industry is leading the way in job creation during what have been some rough economic times.

The industry is proud to be investing in America’s future, which is why we are puzzled today that the new budget from the White House, again, calls for increased energy taxes that could set back some of the progress we have made.  There are three basic ways to get the energy that fuels our economy and maintains our quality of life.  We can produce it here,

U.S. companies can produce it abroad and bring here,

or we can buy it from foreign companies and countries who occasionally have little interest in what’s best for America.

Two of these three ways improve our energy security, create jobs, and increase government revenue.  But oddly the White House budget wants to increase taxes on domestic energy production and the production by U.S. companies of energy abroad.

Last year when the budget was released the president said that “… our country has always done best when everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.”  Yet this year’s budget does nothing to expand access so that American companies have a shot at developing American resources, it seeks to raise tax rates on an industry that already pays the highest effective tax rate, and it raises those taxes by changing the rules on expensing costs just for one industry.  This is not how our country does best.

The effect of increased taxes is no mystery: Higher tax rates discourage that which is being taxed.  Which could cost jobs, energy security and, ironically, the very revenue that government is chasing.

There is a better way…fair taxes and greater opportunity for energy development for our industry, means oil and gas companies making that next energy investment.

Energy offers a tremendous opportunity for America.  It is time for Washington to embrace that opportunity.