Romney Sets the Record Straight on Obama’s Push for Higher Energy Taxes
In the first presidential debate, Gov. Mitt Romney challenged President Barack Obama on his administration’s nearly four-year long campaign to impose billions in new taxes on U.S. energy producers. We should be grateful to Romney for bringing this long simmering issue to the fore.
Selectively raising taxes on a handful of America’s largest energy companies, as Obama wants to do, is the flip side to his plan for remaking our economy into a green energy utopia. The president wants to hamstring the fossil fuel economy with higher taxes, ever more burdensome regulations, and restrictions on drilling to give a leg up to his pet green energy projects. We should be grateful to Romney for calling out Obama in the Denver debate about “picking losers” and pouring $90 billion in subsidies to Solyndra and other politically connected, crony capitalist organizations.
How’s the green jobs campaign worked out so far? According to the White House’s own numbers, by the end of 2010 just 225,000 green jobs had resulted from the stimulus program in return for that $90 billion. By comparison, the U.S. energy industry employs more than 9 million people, invested $71 billion in earnings (not government subsidies) back into renewable technology research between 2000 and 2010, and is comprised of some of the biggest taxpayers in the country. Writing on Forbes, Christopher Helman notes that Big Oil takes the biggest hit:
ExxonMobil in 2011 made $27.3 billion in cash payments for income taxes. Chevron paid $17 billion and ConocoPhillips $10.6 billion. And not only were these the highest amounts in absolute terms, when compared with the rest of the 25 most profitable U.S. companies … the trio also had the highest effective tax rates. Exxon’s tax rate was 42.9%, Chevron’s was 48.3% and Conoco’s was 41.5%. That’s even higher than the 35% U.S. federal statutory rate, which is already the highest tax rate among developed nations.
Has the White House seen the recent report from the Washington-based Progressive Policy Institute which recognized the oil and gas industry – including ExxonMobil, ConocoPhillips, Chevron, and others – as “investment heroes,” with more than $36 billion invested domestically in 2011? It should be pointed out that PPI is no GOP shadow organization; it is known also as Bill Clinton’s “idea mill.”
In the Denver debate with Romney, Obama said: “The oil industry gets $4 billion a year in corporate welfare. Basically, they get deductions that those small businesses that Governor Romney refers to, they don’t get.” Nonsense. The use of the term “corporate welfare” or “subsidies” to describe what are ordinary tax provisions under federal law, many of them widely available to American industries, is a complete misrepresentation of the facts. For example, the Section 199 tax deduction goes to all domestic manufacturing and is made use of legitimately by producers of “clothing, roads, electricity, water, renewable energy projects, and many other things produced in the United States … including Hollywood movies.”
New taxes on U.S. oil and gas companies would kill jobs, give our foreign competitors a huge competitive advantage, and reduce funding available for exploration and drilling. Do we really want to hobble our domestic energy firms like this when California is now moving to record gas prices and even rationing?
Let’s hope Romney keeps the debate on higher energy taxes where it need to be – at the top of his policy agenda as we approach Nov. 6.
This post was tagged under: Indiana Politics