Posted January 27, 2012
Oil and natural gas opponents think they’ve got some ammunition in a NBC News/Wall Street Journal poll from nearly a year ago showing that 74 percent of Americans support “Eliminating tax credits for the oil and gas industries.”
One problem with the February 2011 poll: There are no targeted tax credits in the Internal Revenue Code currently being used by the oil and natural gas industry.
The inconvenient truth for industry opponents is that contrary to what some politicians and pundits have said oil and natural gas companies currently aren’t receiving any unique tax credits or deductions.
Since its inception, the U.S. tax code has let corporate taxpayers recover costs and be taxed only on net income. These cost-recovery mechanisms shouldn’t be confused with tax credits or “subsidies,” which are direct government spending.
That’s it. Unfortunately, as last year’s NBC/WSJ poll shows, many Americans believe these subsidies exist. It’s testament to a misinformation campaign relentlessly (and disingenuously) waged by those who want to raise energy taxes, claiming oil and natural gas companies need to pay “their fair share.” This despite the fact the industry pays $86 million a day to the U.S. Treasury in rents, royalties and income tax payments, with an effective income tax rate that averaged 41.1 percent in 2010 (compared to 26.5 percent for other S&P Industrial companies).
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.