In a White House speech promoting his American Jobs Act and billions of dollars in tax increases to pay for it and other federal spending, President Obama called for creation of a U.S. tax code that “should give an advantage to companies that invest in the United States of America and create jobs in the United States of America.” But Congress can’t raise taxes on American companies that create jobs and simultaneously give these companies an advantage in the tax code. The two actions directly contradict each other — like asking someone to run and stand still at the same time.
Companies that manufacture fuels and petrochemicals and that produce oil and natural gas support more than 9 million American jobs — and can create many more if only Obama will stop throwing regulatory roadblocks and proposed tax increases in our path.
These American companies clearly meet the definition of what the president calls “companies that invest in the United States of America and create jobs in the United States of America.”
Yet Obama wants to raise taxes on the oil and gas sector by $41 billion over the next 10 years. How does this “give an advantage” to these job-creating companies?
The tired old claim that Obama made in his recent jobs speech to Congress that “tax loopholes for oil companies” exist is false. America’s suppliers of proven, reliable and abundant energy generated by oil and natural gas simply get tax deductions that are comparable to — and in some cases more limited than — the deductions other American businesses get to help them create and retain jobs for American workers.
Even the federal Energy Information Administration excludes these common deductions from its list of energy subsidies because they are so widely used.
Several studies have shown that eliminating these tax deductions for the fossil fuels sector would not increase federal revenues, but rather decrease them.
Imposing discriminatory tax increases on America’s traditional energy companies will make these companies less competitive against foreign rivals. This will result in lower output, lower employment, lower earnings, lower tax payments and higher energy costs.
Oil, natural gas, refining and petrochemical companies are some of the biggest taxpayers and biggest employers in America. They contribute hundreds of billions of dollars in taxes and fees to government at the federal, state and local levels.
These companies simply want to be treated like other American companies when it comes to paying taxes. If tax deductions are justified to preserve the jobs of Hollywood producers, computer software engineers and architects, why aren’t they justified to preserve the jobs of refinery and petrochemical workers?
What’s needed in Washington is an understanding of the important role that energy companies play in the American economy and in job creation. It’s time for America to develop an energy policy based on reality rather than ideology, grounded in what works rather than in hopes and dreams.
Other nations have tried and failed to generate prosperity by centralized government planning. America became the world’s economic leader in the last century by giving private-sector entrepreneurs the freedom to innovate, grow their businesses, and create jobs for millions of men and women. If we want to remain the world’s economic leader in this century, we need to do that again.
Here’s my message to Obama and everyone else calling for more tax revenue from oil and gas producers and fuel and petrochemical manufacturers: Let us produce and manufacture more, enabling us to create more corporate and personal taxpayers.
Lift the unprecedented regulatory burden on us and other American manufacturers that is wiping out American jobs and sending them abroad.
Allow American companies to extract more oil and gas from right under our feet and off our shores. Allow America to get vast quantities of additional oil from our close friend and neighbor Canada by building the Keystone XL pipeline.
The companies in the fossil fuels sector aren’t the cause of America’s energy and economic problems. We’re an important part of the solution to those problems. And we are vital to creating a new prosperity for the American people.
Charles T. Drevna is president of the National Petrochemical & Refiners Association.
