Fairness should be guide to energy tax reform

Energy_thb

by NW Spotlight

As the United States came out of its recent recession, 40 percent of the new jobs created between 2007 and 2012 were energy jobs. This one industry sustains our economy more than any other.

This makes Wednesday’s Senate Finance Committee hearing on reforming our outdated energy tax code all the more important. Our own Sen. Ron Wyden will be among the Senate members speaking, along with industry leaders, analysts and educators.

I hope the committee will come away from this hearing with a renewed understanding of the importance of the energy industry in the American economy and a knowledge of the damage that poor energy tax policy could do as we still struggle to put Americans to work.

Unfortunately, I fear that some in the administration do not get it. They seem to believe that the energy industry is one to attack and fear and that it should somehow be punished, despite carrying the nation through the recession. And to punish it, they incorrectly and unfairly characterize ordinary tax credits and deductions as subsidies.

Two examples: The administration wants to deny energy companies the Section 199 tax credits that all manufacturers and producers get for creating new jobs as well as dual capacity tax credits for taxes paid to foreign governments. Margo Thorning writes in greater detail about these unfair attacks on the energy industry.

But the bottom line is that these measures would severely damage not only the energy industry, but also the American economy. That hardly seems like a good idea when it comes to tax reform.

The energy industry haters want us to believe that somehow oil and gas companies are tricking the American public, stealing our money and paying much less than their fair share of taxes. The facts show the opposite is true.

Last year The New York Times (hardly a conservative cheerleader) analyzed effective tax rates between 2007 and 2012. Lo and behold, the energy industry came in at 37 percent, compared to 29 percent for companies in the Standard & Poor’s index as a whole. U.S. News & World Report does a nice job of summarizing the analysis if you want the details.

Let the facts show that the energy industry is paying its fair share and then some. Tax reform should make the system more fair, not target one industry for punitive measures.

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Posted by at 12:52 | Posted in Energy, Taxes, U.S. Senate | 49 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jack Lord God

    Frankly the energy industry itself has done an abysmal job on this. Right now you have virtually all of America believing that if you make oil, you get these giant subsidies and pay no taxes. If you are Exxon and you but a backhoe as an equipment expense, it is a
    special carve out for you that you are not taxed on the money you spent
    for it, no other business gets that. If gas is $4 a gallon, Exxon gets about $3.89 of that money and the 11 cents left over is the pittance we run our school systems on. That’s what most of America believes. If you doubt me, next time you hear about “we need to stop subsidizing oil, it’s ridiculous” ask that person to name one of these outrageous oil subsidies. I have never gotten an answer without someone having to look at their phone and google for twenty minutes. Get them flustered enough and they might miss you walking out and thus have to pick up your check.

    • w.fecht

      Say What? gas taxes go to schools? since when? unless you are talking about robbing theTransportation funds for roads and highways.

      • Jack Lord God

        Read the post before responding. helps you not make mistakes like these.

    • Ericinestacada

      Here is your answer….your not very smart. I believe the concensus number is 5 BILLION A YEAR to oil and natural gas in subsidies/tax breaks. FROM EXXON’S OWN WEBSITE!! They state how they get a small percentage (13% for gas/oil) of the overall energy subsidies doled out by the fed gov. By “the fed gov” means with MY MONEY.
      The site “Taxpayers for common sense” has a article you obviously need to read. Stupidest post I ever read.

      • Jack Lord God

        “Here is your answer….your not very smart.”

        When you mess up the common conjunction of “you” and “are”, which is ” you”re” with the possessive form of the pronoun “your” to call someone not smart – well, you really look like an idiot.

        your – “here is your jacket”, “where is your house?”

        you’re – “you’re a dolt”, “you’re an idiot it you think capitalizing words mid sentence makes you appear knowledgeable”

        > Stupidest post I ever read.

        On the upside, you do make my point for me. Not only could you not form a correct conjunction, but you flailed away without naming a single subsidy. you demonstrated exactly what I was talking about, Thanks!

        • Eric

          You is an ijit. True, I ounce writ the word of as ov. Good on you fear learning sophomore American. While you was learning your and you,re I was figuring out descrete and combinatorial geo metry. Go bac to sealing perv toys.

          • Anneal Goldspiker.

            OPU, monsewer!

    • EiE

      Jack ‘drink the kool aid’ Lord. Exxon had a PROFIT of 87,000,000 A DAY! in the 3rd quarter of 2013. They spend $300,000 A DAY lobbying members of congress not to mention their political contributions. Quit getting your news from a Cracker Jacks box.

      • Jack Lord God

        >Jack ‘drink the kool aid’ Lord. Exxon had a PROFIT of 87,000,000 A DAY!

        So? You know there was a cheesy horror movie int he 80’s called “Mothers Day” . It had a scene where a group of women are walking down the street and this lunatic is on the street corner yelling over and over “Rockefeller makes a million dollars a day”. It had nothing to do with the plot line, just as your noting of Exxon’s profit has zero to do with my point. The profit of a company has nothing to do with whether or not they get some inordinate subsidies.

        > They spend $300,000 A DAY lobbying members of congress not to mention their political contributions.

        Again – So what? Hiring lobbyists does not establish one getting subsidies.

        I would like to thank you in the same way as I thanked the bad conjunction loon above – Neither one of you could name an extraordinary subsidy the oil companies get off the top of your head. You both just popped off with nonsense as I predicted. Thanks – Nothing proves a point better than someone like you giving an exact demonstration of it.

        • Jack Lord God

          BTW – I should point out that I am not claiming oil companies do not get any subsidies. They do. What I am saying is the frothing mouthed who rail against them are hilarious in that they can never name one. It’s really just a great bar game to get out of paying the check, not a lot more.

        • Eric

          So! That’s all you can say. 87 million a day in profits means NO MORE TAX BREAKS you knuckle head! Getting rid of the intangible drilling cost tax break would save the fed BILLIONS. Same as % depletion tax break. This stupid little game of yours about “naming” the actual tax breaks is ridiculous. It’s enough to know that Exxon alone makes tens of billions in profit a year and they still get tax breaks they don’t need. Typical Rupert blathering on but missing the real issues.

          • guest

            Eric the whale-read, blubbering more substance than a Japanese or Norwegian whaler can take aim at, twit, smelling like ambergris before it mellows into some par fume essence.

  • Bob Clark

    Senator Wyden has made a career out of opining, whining about the U.S oil and natural gas industry, shamelessly grabbing onto the populist myths of huge oil company subsidies and monopolistic collusion among oil and natural gas companies. If you try to tell the low information voter oil and natural gas companies actually pay billions in net corporate income taxes each year, it won’t register.

    • Jack Lord God

      So true – The key here is there are examples of weird tax breaks here and there that energy companies get, however not really anything all that inordinate compared to any other industry.

      What the low information voters don’t really understand is, so what? OK, so you eliminate some obscure tax break Exxon gets…..and then everyone pays a nickle more for gas……and then what?

      Just have fun with the low info’s. They have been fed a list of this or that to hate, Bush, oil companies, insurance companies, police, they don’t really know why they hate them, just that they are supposed to. That’s why I say ask them to name one of these wildly unreasonable famous subsidies and watch their head explode. Take advantage of the ignorance and just have fun with it.

  • wfecht

    There is only one solution. remove the loopholes and reduce the taxes.
    The energy jobs were not created because of the loopholes. the jobs were created because of increased production and new oil fields. there was a demand for labor. companies do not hire because of tax breaks as much as Obama and congress wants to believe they can create jobs by offering tax incentives. the labor market just doesn’t work that way. Make work projects (think CCC) just don’t work unless taxpayers foot the bill. at the time the public was hoodwinked into believing only the rich would pay income tax. As PT Barnum said “there is a sucker born very minute”. so to the taxpayers I say “suckers”. Congress only has power to tax and spend. they have no resources to create. monetary destruction is the only thing they do.

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