At a time when America needs economic stability and increased energy security, the government should not impose new taxes and fees on the oil and natural gas industry.
Some policymakers are considering raising taxes on America’s oil and natural gas industry. This is a flawed proposal that would negatively impact the industry’s ability to create new jobs — and could disrupt the supply of reliable, affordable energy that America’s employers rely on to run their businesses.
In addition, higher energy taxes could endanger the significant tax revenue the industry generates for our federal, state and local governments. As our policymakers look for solutions to America’s deficit crisis, cutting into this flow of tax revenue could only make this crisis worse.
Here are some real and potential consequences of higher energy taxes on the oil and natural gas industry:
- New taxes kill jobs. With America trying to recover from a period of serious economic decline, new taxes could hurt workers by depressing job creation just when employers would otherwise be looking to add employees.
- New taxes hurt consumers and businesses. Historically, higher taxes result in less domestic energy, and restrained supplies often lead to higher energy costs for consumers. In today’s economy, that could not only stifle a recovery but also leave Americans more dependent on foreign oil and natural gas, as well as result in fewer jobs for workers and mean less oil and natural gas for consumers and businesses.
- The oil and natural gas industry in the United States is one of the success stories of the American economy, supporting 9.8 million workers in good jobs that offer solid wages and benefits. These workers include welders, electricians, truckers, gas station attendants and small business owners who work hard to bring energy to America’s homes, factories, hospitals and cars. Additional taxes would likely drive these jobs overseas at a time when America needs to create jobs domestically.
- New taxes are a threat to American tax revenue. The industry already provides more than $95 million per day in tax revenue to the U.S. Treasury. It’s estimated that increased access to domestic energy development could generate as much as $1.6 trillion in revenue to federal, state and local governments, according to ICF International. New energy taxes would threaten this vital source of tax revenue.
- Millions of Americans have seen their retirement savings shrink. Billions in new taxes on American oil and natural gas companies will hurt millions of those whose retirements depend on mutual funds, pension and retirement plans that own oil company shares.
- Plans to strengthen America’s energy security would be undermined since higher taxes would lead to less—not more—domestic oil and natural gas production. All reputable forecasts show that oil and natural gas will be required to meet the majority of America’s energy needs for decades to come. As the economy recovers, America will need all the energy we can produce. Higher taxes would rob the industry of the capital it needs to invest in alternatives and reduce supplies of the oil and natural gas needed as a bridge to thefuture.
At a time when other countries are providing incentives to develop their own energy resources, the United States is the only country actively discouraging it. The bottom line is that what happens in the oil and natural gas industry reverberates throughout the entire economic spectrum.