Policymakers are talking a lot about energy and energy policy. What follows are some of the current claims and proposals, along with realities that need to be considered when evaluating these claims.
RHETORIC: Taxes need to be raised to help address the growing federal deficit and stimulate job creation.
REALITY: Raising taxes as the economy is trying to recover from a deep recession is a recipe for disaster. President Hoover did it in the 1930s, President Carter did it in the 1970s and President Obama wants to do it now. It did not work then, and it will not work today. Tax hikes kill existing jobs and can depress future job creation. According to a preliminary estimate based on Center for American Progress data, thousands of oil and natural gas jobs would be destroyed by the Administration’s new taxes and fees.
RHETORIC: Taxes targeting the oil and natural gas industry are okay because they don't affect consumers or other industries.
REALITY: The Administration’s tax plan puts the economic burden on hardworking Americans and their families. New taxes hurt businesses, threaten jobs and lead to higher prices for consumers. Higher taxes are a burden felt throughout the economy and discourage business expansion, investment and job creation. They could result in less, not more, job security for American workers and threaten other benefits.
RHETORIC: Most Americans want the federal government to pursue alternative and renewable sources of energy instead of drilling for oil and natural gas.
REALITY: A 2010 Rasmussen poll found that 72 percent of registered voters favor offshore drilling. The Administration is not listening to the majority of Americans who want a stronger economy using our own vast oil and natural gas resources. While other countries are providing incentives to develop their own energy resources, the U.S. is the only country actively discouraging it. Higher taxes would also rob the industry of additional capital needed to invest in alternative and renewable fuels.
RHETORIC: The Administration says it wants to make America less dependent on foreign oil.
REALITY: Historically, higher taxes have resulted in less domestic energy – and restrained supplies often lead to higher energy costs for consumers. In today’s economy, that could stifle a recovery and make Americans more dependent on foreign oil and natural gas. New taxes will make it more expensive for oil and natural gas companies to expand or initiate new exploration and development programs, putting our nation further behind in the race for more energy.
RHETORIC: The administration says it wants to create millions of new jobs in the energy sector.
REALITY: Saddling the industry with additional taxes would likely drive jobs overseas at a time when America needs to create jobs. The U.S. oil and natural gas industry is one of the success stories of the American economy, directly and indirectly supporting 9.2 million workers in good jobs that often pay well above the national average. It is not an economic recovery when the jobs of millions of industry workers in this country are placed in jeopardy.
RHETORIC: The administration says that current tax policies provide taxpayer subsidies to the oil and natural gas industry
REALITY: The assertion by the Obama Administration that tax provisions intended to help companies recover their costs have resulted in overproduction is ludicrous. America needs all the energy it can get and would be hurt by higher taxes that would constrict supplies, result in higher costs and kill jobs. Such wrong-headed policy prescriptions suggest that Americans must make an unwise and unnecessary choice between green energy and traditional oil and natural gas. Americans will need all energy sources in the future and such false choices would only hurt workers, businesses and the economy.
RHETORIC: Oil and natural gas industry executives control the bulk of stocks in their respective companies and would be the only ones directly affected by higher taxes.
REALITY: Imposing new taxes on oil and natural gas companies undermines the retirement security of working people. Almost 43 percent of oil and natural gas company shares are owned by mutual funds and asset management companies. Those funds are a major retirement savings and investment tool for millions of middle-class Americans have seen their retirement savings shrink. Billions of dollars in new taxes on U.S. oil and natural gas companies will only hurt those retirement-aged investors looking for financial stability.
To take action against harmful new taxes on the industry, please visit our partner site, EnergyCitizens.org. Or sign up for updates to stay informed about this and other important energy issues.
