MUDDLED PLAN RISES AGAIN
February 19, 2008
The House of Representatives is once again seeking to introduce a measure to increase taxes on U.S. oil and natural gas companies. Little has changed on the national or global energy stage that would warrant such an increase. And considering the dollars U.S. oil and natural gas companies already pay out, any future tax rise will do more harm than good, says H. Sterling Burnett, a senior fellow with the National Center for Policy Analysis.
According to the Energy Information Administration:
- In 2006, the top 27 energy producing companies paid more than $81 billion in income taxes.
- Industry income tax in 2006 -- as a share of net income -- averaged 41 percent.
- That represents an increase of 82 percent over just a two-year span; other U.S. manufacturing industries pay roughly 22 percent.
There are other reasons not to overtax the industry, says Burnett:
- Since 1992, the oil and natural gas industry has invested $1.25 trillion in hopes of finding new ways to produce, refine and deliver its product to consumers.
- The industry also invested money into renewable and sustainable energy sources. Technological innovations, refinery capacities and distribution methods have all improved thanks to the foresight and reinvestments of American oil and natural gas companies.
Industry reinvestments also lead to additional jobs and provide a booster shot to a weakening economy, says Burnett. And they help to create healthy investment portfolios for millions across America. For our hard-working neighbors whose retirement or pensions are tied into oil or natural gas companies, higher industry taxes spell trouble.
Source: H. Sterling Burnett, "Muddled plan rises again," Washington Times, February 16, 2008.
Browse more articles on Tax and Spending Issues