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 in a time of economic decline 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. This is simply the wrong choice. 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 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. Higher industry taxes could result in less, not more, job security, make health care more expensive for American workers and threaten other benefits. Higher taxes steal money from the American household and are a burden felt throughout the entire economy, discouraging business expansion, investment and job creation.
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 recent poll found that 61 percent of Americans who voted in the 2008 presidential election support increased access to offshore oil and natural gas resources. 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 6 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: 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 who are watching 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.