By: Peter M. Duncan
I read with interest in the Houston Chronicle this week about President Obama's bid to repeal tax breaks for oil and gas companies. This is a huge issue, not just to the industry it affects, but to the everyday citizens that fill their tanks up or use electricity to heat and air condition their homes.
The reason for the decision? The hope that up to $1.2 trillion could be shaved from the federal deficit over the next 10 years.
Meanwhile, our oil industry leaders are rallying behind the Joint Select Committee on Deficit Reduction to keep those deductions in place. The break helps companies pay for domestic manufacturing, intangible drilling costs, chemicals used to increase production and other expenses.
These unnecessary subsidies ... harm public health and our natural resources while doling out hard-earned taxpayer dollars to mature industries that need no government assistance," the heads of 12 environmental advocacy groups told House and Senate leaders last month.
Stephen Comstock, manager of tax policy for the American Petroleum Institute said, "It's up to us to continue on with our education campaign and let people know what the issues are and what the value is that we already bring to the federal government" in royalties and other revenue.
I think what's missing here is an awareness of the domino effect. Take away one thing and another thing must compensate--It's a basic principle. Of course the biggest targets to recoup tax dollars from are the large oil companies, i.e. Exxon and Shell. The bigger the company, the more they drill and thus the more they need to budget for safety and environmental protection while drilling. Do we take that away?
If we do, do we spend more to import the foreign oil we now need to make up for what we aren't getting domestically, due to taxes? And where do you think the money will come from for the additional taxes that have to be paid? The consumer, of course, those costs will be passed on.
I'm not suggesting "Big Oil" shouldn't be taxed. What I am suggesting is a fair and logical approach to that taxing. One that doesn't ultimately make things worse for the little guy.