Posted August 31, 2017
President Trump’s call for tax reform this week, kicking off the administration’s push for pro-growth measures to spur investment, create jobs and raise earnings is one we can certainly understand. The president said:
“We need a competitive tax code that creates more jobs and higher wages for Americans. It’s time to give American workers the pay raise that they've been looking for, for many, many years. … If we do this, if we unite in the name of common sense and the name of common good, then we will add millions and millions of new jobs, bring back trillions of dollars, and we will give America the competitive advantage that it so desperately needs and has been looking for for so long. It’s time.”
No argument here. The natural gas and oil industry is about economic growth: investing, creating jobs and boosting worker pay for years – on the way to supporting 10.3 million jobs while adding $1.3 trillion to the national economy and aiding growth across all 50 states.
In turn, industry’s economic activity generates revenue for government – about $70 million a day on average to the federal government in income taxes, rents, royalty payments and fees. This cycle of forward economic momentum should be sustained and expanded by pro-growth tax reform.
Cost recovery is key to new investments and activities for all kinds of businesses, including natural gas and oil companies. The ability to recover certain expenses affects the cost of the capital used to invest in equipment, structures and technologies. Cost-recovery provisions in the tax code are pro-growth, fostering new investment.
Natural gas and oil companies are capital intensive, investing in all facets of energy development, from well equipment to pipelines to refiner towers. The ability of companies to make substantial investments in a sector that literally fuels the broader U.S. economy is helped by cost-recovery tax provisions.
The American people get the point. An election-night survey of actual voters last November found more than seven in 10 oppose changes in the U.S. tax structure that would decrease energy investment and reduce production:
The natural gas and oil industry is a key driver of the U.S. economy – which policymakers across the political spectrum want to see growing at a more rapid pace. Tax reform should acknowledge industry’s significant economic role and support continued growth, benefitting consumers, businesses and manufacturers with more energy while also generating revenues for the treasury.
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.