A left-wing group “OleNM” has an ad campaign going that attacks the industry for making $137 billion in profits and misleadingly claims that “we pay the oil companies twice – we pay ‘em at the pump AND we pick up their bill on Tax Day – when we cover their $4-billion-dollar tax break.”
To say the least, this last statement is simply inaccurate. No one pays for tax breaks because tax breaks are simply taxes that are not paid to the government. The oil industry is not taking money out of our pockets. Among other policies the ad campaign claims are “subsidies” are “the Exception to Passive Loss Limitations for Working Interests in Oil and Natural Gas Properties.” If you, dear reader, can even tell me what that means, let alone explain exactly why the federal government has a moral obligation to tax this activity (and not, for example, municipal bonds), then you deserve a massive gold star. The fact is that the federal tax code is too complicated, too political, and too micromanaging of economic activity to make any sense to anyone.
The reality is that more taxes on oil and gas will simply chase the industry out of this country, will raise prices on American consumers, and will do nothing to resolve our spending-induced national debt. If you want to get the real scoop on oil and gas prices and the industry itself, attend our upcoming policy forum on the topic on Wednesday, May 30.