As voters around the country wince at rising gas prices, panicked Democrats, in a rush to cover the failure of their all-or-nothing bet on the alternative energy industry have started singing a familiar tune – blame the oil and gas industry. Instead of facing the reality of his owned failed policies, President Obama is calling for an end to the "tax giveaways" he claims amount to $4 billion in “subsidies” to the energy industry.
This tactic isn’t surprising given the effect that rising gas prices have on the President’s approval ratings and his obsession with re-election. But, less than truthful innuendos and political spin hardly helps American working families that are getting hammered at the pump.
If our leaders are going to have an honest discussion about energy, it's important to clear up a few rumors, misconceptions and outright falsehoods being perpetrated about the oil and gas industry. Let's begin with three of the more common ones:
1. The industry doesn’t receive any taxpayer funded subsides. None.
2. Rampant speculation and Wall Street tricks aren’t driving up gas prices.
3. The oil and gas industry is not dodging the taxes they owe and withholding “their fair share”.
I'll say it again; contrary to popular opinion and the President's spin, oil and gas gets no taxpayer funded subsidies. The tax code does allow them certain tax credits and deductions to encourage continued investment in an industry that is heavily front-end loaded with capital expense. These are the same kind of incentives available to Coca-Cola, General Electric, Ford, and Micro-Soft and other companies doing business in the U.S. Or, for that matter, like the deduction for mortgage interest payments enjoyed by homeowners. But, importantly these are tax credits, and markedly different from direct taxpayer cash subsidies like the 45 cent per gallon payment blenders get to put ethanol in fuel mixes.
When businesses invest in America, we all benefit. The oil and gas industry plows about $300 billion into domestic projects per year – that's 75 times more than Obama's phantom "taxpayer giveaways" amount - and employees over 9 million people. Those are real numbers; not Washington spin, and if government would allow and encourage even more domestic production there would be more jobs and more investment – and more total taxes paid, too.
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