Tax increases on energy are hurting the economy and American competitiveness

Finding ways to pay for $ 1 trillion infrastructure plan President BidenQueue Senior Assistant Berlin Nightclubs Participate in COVID-19 Test Project It focuses on the oil and gas industry. Among other things, the administration wants to increase corporate tax rates from 21 percent to 28 percent and replace fossil fuel “subsidies” with clean energy incentives. Proponents of her case have been working to make the actual transcript of this statement available online. Democrats in Congress are also drafting legislation to regulate the largest greenhouse gas emissions between 2000 and 2019, a move that could raise $ 500 billion over the next decade.

We have seen this movie before. At the beginning of his reign, President ObamaBarack Hussein Obama’s podcast host Kathy Halper says Obama’s 60th birthday party is “absolutely disgusting” He proposed to eliminate all tax breaks for oil and gas exploration companies, and In 2017, it imposed a $ 10 barrel tax on oil production, banned new charcoal leases on federal land, and imposed a virtual ban on coastal drilling. Even the former President TrumpDonald Trump has launched a bid for Georgia lt to cancel Trump’s election. Trump’s campaign, RNC return donors Another .8 million in 2021 To help pay for the big tax cut, he took into account the tax on oil and gas.

Binden’s plan has three specific objectives: unrealistic drilling costs, percentage reductions, and foreign tax credit. Some management companies in the administration want to limit similar reductions. But reducing or eliminating oil, natural gas, and minerals tax choices would be a serious mistake. Over the past 20 years, the import of minerals and metals, which are crucial to the transition to clean energy technologies, is particularly important for heavy metals.

Since 1913, oil and gas companies have been able to pay unimaginable drilling costs, similar to the research and development cuts enjoyed by other industries. They are necessary costs to prepare wells for production, but this is not worth saving. These include wages, fuel, supply, maintenance, survey work and land clearance, and 60 to 80 percent of total excavation costs. Avoiding this reduction would weaken production and innovation in the energy sector, thereby jeopardizing important technical advances such as methane emissions and the reduction of oil wells and wells.

Percentage Reduction Allowance provides an effective way to calculate the underlying value of mineral deposits and has been around for over a century. The reduction applies not only to some oil and gas producers but also to coal, iron ore and sand and gravel producers. Many “sliding” wells – less than 15 barrels per day and controlling 20 percent of GDP – are dumped into the well. Especially for royalty owners and small companies.

Finally, the administration wants to eliminate foreign debt on oil and gas production. Such a move would not only discriminate but also undermine the competitiveness of the largest US energy companies in the global market.

It is sad and misleading that politicians call these tax cuts “subsidies.” In fact, the oil, gas, and coal industries do not receive subsidies, but like any other industry, they are allowed to take tax deductions for their expenses. These deductions are not the result of special gifts. Manufacturers, mining companies, and other businesses that use basic operating costs are a standard of relief. For example, oil and gas companies may reduce costs for items such as equipment purchases and payroll technicians. The point of these deductions – as with any other industry or individual – is to make sure that the tax is only paid on income after expenses.

In practice, the tax options for the oil and gas industry are very small, reaching $ 3 billion annually. Moreover, before the outbreak, the industry was paying taxes more efficiently than anyone else and contributing more than $ 87 million a day to the federal treasury. The industry paid billions of dollars a year in regional and local sales, property, income taxes, and royalties.

During the worst of the epidemic, oil and gas companies suffered huge and small losses, laid off thousands of workers, and significantly reduced investment costs. Although domestic and global economies gain strength, profits are slowly recovering, and the balance sheet of many companies remains weak. In a recovery state, walking a tax on an industry creates less economic sensitivity.

From now on, we must not forget that the United States is now the world’s number one oil and natural gas producer. We have become a net energy exporter. Imposing additional tax burdens on the U.S. energy industry, one of the most controlled and tax-paying industries in the United States, not only endangers our free will, but also costs energy for businesses and families.

Bernard L. Weinstein is a professor of applied economics at the University of North Texas, a former associate director of the South Methodist University Maguire Energy Institute, and a Fellow at Goodenough College in London.

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