The End of Domestic Oil Production

President Obama’s budget contains at least eight different tax hikes that target domestic oil production. From the removing tax breaks to the creation of cap and trade, the budget is sure to cripple domestic oil production.
Obama said during his Democrat nomination speech, “I will set a clear goal as president: In 10 years we will finally end our dependence on oil in the Middle East.”
The only way the U.S. is going to reduce dependence on Middle Eastern oil, while simultaneously reducing American production through tax increases, is either by high trade barriers to foreign oil or by heavily taxing the use of all oil, foreign and domestic.
Taxing the use of oil to purposely reduce its use, possibly through cap-and-trade, places a high burden on consumers.
Both would cause significant harm to the American economy.
We are witnessing an assault on capitalism. For years, “Big Oil” and anyone associated with the energy industry have been made to be the enemies. That’s not the United States of America.
It’s the people in the oil and natural gas sector that make this country work. It is the people who get up daily and go to work. These are the people striving to not participate in this current downturn. They’re not the enemy.
A prime example is the nation’s stripper wells, or the 420,000 stripper oil well “mom and pop” operations in Oklahoma and across the U.S. They are already threatened by declining prices. Taxes place them in the cross hairs of extinction.
These stripper well producers are small business owners. They are very different from the “big oil” companies. They do not have fancy board rooms on the 20th floor. They do their books on the kitchen table. Yet, these proposed provisions would lead to the abandonment of literally hundreds of thousands of wells and bankruptcy of these family businesses.
Meanwhile, high trade barriers would harm all American consumers by driving up the price of oil. All we have to do is look back at last summer and recall how serious the economic situation was then.
These tax and trade barrier schemes are 180 degrees out of phase. What is needed is lower taxes and less red tape so American companies and workers can compete internationally to produce oil at lower prices.
Even if the poorest in our society are compensated by government handouts with cap-and-trade dollars, oil production and use would be reduced which would drive up prices for all consumers.
President Obama, or Congress, should strip all tax hikes — including the ones on oil companies — from the budget.

Was this article helpful?

Related Articles

Leave A Comment?