Occasionally I like to vent. Today is occasionally!
First, do not assume I’m trying to be political here, I’m not. Rather, just pointing out that the continued bashing of the oil companies by the Obama administration -- with characterizations like “taxpayer subsidies for big oil profits” or “corporate welfare,” seems a clear effort to mislead the public. Moreover, it will only add to the negative impacts $4/gallon gasoline is having on the economy and, most especially, the consumers’ psyche.
For the boating industry, rising gas prices represent another barrier to growth. While we’re convinced existing boaters won’t give up their sport, there’s little doubt high gas prices will: influence how much boaters use their boats; play a negative role in new boaters’ decisions to buy; and put a damper on thoughts of “moving up” for existing boaters. Clearly, what we do not need is a President stumping around the country dramatizing high gas prices and implying that taxing big oil will somehow solve something. What?
Of course, there’s little explanation ever offered about the tax-big-oil idea. But, it intentionally plants the notion that the oil industry is gouging everyone at the pump while ripping us off for big tax subsidies, too! The truth, however, is the tax referred to is the same tax credit given to virtually all companies that produce a product (like boat manufacturers, for example.) These companies get to write off 9 percent of their revenue. Moreover, oil companies don’t even get that much - they currently only get a 6 percent deduction. So much for what the administration calls a preference for big oil!
So taxpayers aren’t subsidizing big oil any more than they’re subsidizing any other manufacturer. Indeed, if you follow the money, you’ll find the oil and natural gas industry pays, on average, more than $85 million per day to the federal government for taxes, royalties and lease payments. And, according to the Petroleum Institute, the industry’s effective tax rate in 2010 was 41 percent.
There’s more. In Congress there’s also a bill that wants to require our domestic oil companies to pay taxes on the royalty taxes they must pay to foreign nations. Such double taxation would blatantly ignore the fact that our oil industry must directly compete with many foreign government-owned oil producers. Since we already have the highest corporate tax rates in the world that make competing in global markets tough for U.S. manufacturers, proposals like these should be viewed by all Americans for what they are: (1) espoused solely for some political gain; and/or (2) created by Neanderthals.
For a White House that wants to claim it’s for energy self-sufficiency, it’s a sad commentary that it spends so much effort trying to convince us doing something to hurt the oil industry will somehow make us feel better about the price at the gas dock. How stupid!
Thanks, now at least I feel better.