Growls

The Tax Foundation policy blog has two informative posts today. The first discusses the issue of who bears the burden of oil industry taxes. They use a Wall Street Journal chart to show who is driving demand for oil, explaining:

“U.S. demand has flattened out, even decreased in the last year, most likely due to the recession. The emerging economies of Brazil, India, China and Saudi Arabia, however, are projected to see steady demand in oil consumption through 2015.”

Michael Vogler of the Tax Foundation goes on to write:

“As U.S. oil and gas companies attempt to keep up with demand in other parts of the world, they are also seeing their profits taxed heavily both inside and outside the United States. Between the years 1981 – 2008 U.S. oil companies paid roughly $700 billion in taxes to foreign governments.

“Recent evidence from the Energy Information Agency (EIA) shows that government entities in the U.S. are also hugely dependent upon the direct and indirect taxes paid by the largest oil companies.  Net earnings for the largest petroleum companies from 1981-2008 totaled $1.4 trillion and the total amount of taxes collected by U.S. governments from the oil companies in that same time period topped $1.95 trillion, roughly 40% more than the industry’s combined profits.” (emphasis in the original)

In the second post at the Tax Foundation’s tax policy blog, Richard Morrison puts “oil and gas tax treatment in perspective,” given that: “President Obama has repeatedly called for tax provisions targeted at the oil industry to be repealed, including during his State of the Union address in February. Since then the White House has continued to single out oil and gas companies, sending a letter to members of the leadership in Congress this week, urging them to 'eliminate unwarranted tax breaks for the oil and gas industry' and instead increase subsidies for other forms of energy.” Morrison then writes:

“All of this begs the question, how much money are we talking about? According to Fiscal Fact No. 260, “Who Benefits from Corporate ‘Loopholes?’”, there were about $2.2 billion in tax expenditures that were specific to the oil and gas industry in 2010. For some perspective, Special Report No. 183, “Oil Industry Taxes: A Cash Cow for Government,” shows us that in 2008 (the most recent year included) the U.S. oil industry collectively paid over $91.5 billion in domestic taxes. That’s on top of $72 billion paid in foreign taxes on income earned abroad.

“It is true that the oil industry benefits from special tax provisions, but so do many other industries. Many tax benefits are poor policy and should be eliminated. There are also many tax benefits that are not limited to a specific industry, and these too could be scrubbed from the tax code. That is what policy experts are talking about when they discuss corporate tax reform: broadening the tax base by eliminating tax expenditures and lowering the tax rates. This type of reform is needed for the whole system, not just one politically unfavorable industry.”

Ya gotta wonder just how much of that is understood by the elected political elite who determine public policy. The Tax Foundation provides much more research information about energy and the environment. Thanks, Tax Foundation.

UPDATE (4/29/11). Radio talk show host Mark Levin points to a map showing gasoline taxes by state by Mark Perry at DailyMarkets. Perry added a remark from the Exxon Mobil blog that it had "earned a little more than 2 cents per gallon" while state taxes range from 26.4 cents per gallon to 66.1 cents per gallon. (emphasis in the original)