Then let's also eliminate business deductions, depreciation, manufacturing deductions for all American businesses. No business in America should be allowed to take a deduction on business costs because that is exactly what IDCs are. Percentage depletion is a depreciation schedule for resource production and ONLY applies to American, independent producers and only to the first 1,000 barrels of production and is capped at 65% of gross income. The manufacturing tax credit applies to ALL American manufacturers and allows a 9% deduction for everybody EXCEPT oil and gas companies who are capped at 6%. JS Herold found that American independent oil and gas producers reinvest over 150% of their profits; meaning for every dollar earned they're leveraging it to find new resources, hire new people and buy new equipment. If these were federal dollars it would be called stimulus. Removing these universal tax treatments is akin to doing the same to tech companies during the tech boom. America is leading an energy revolution and NRDC is hell bent to stop it.
If this discussion is truly about revenue I would point out that the $40 billion the President has targeted over 10 years comes to an annualized $4 billion/year. In June of this year the Department of Interior held the first offshore lease sale in 18 months. An offshore lease sale is an auction setting whereby companies interested in exploring that particular acreage bid on the right to access, simply to ACCESS, the area to begin exploration. Any money generated is kept, no refunds, no cash back. That one day lease sale generated over $1.5 BILLION in revenue for the US Treasury, well over 25% of the annualized $4 billion in punitive tax policy. If a company finds a resource on that acreage the company pays a royalty of 12.5% off the top of any oil or natural gas produced. Companies also pay an annual rental payment to the treasury to keep the lease. That is before we get into the whole hiring high school educated workers at an average salary between $65-$80K/yr with benefits. Workers who pay into social security. Who pay income tax and who buy goods and services. IF this were truly about revenue and NOT about punishing an economic sector we would be talking about export terminals for liquified natural gas. We would be facilitating more production on federal lands on the onshore...which also, by the way, hold lease sales and generate 12.5% royalties for the federal government on every barrel and MCF of resource produced.
Bottom line; grow industries. Don't punish them. If you think the oil and gas guys have a sweet ****ing deal, give it to everybody else. They're not holding them away from anybody. It is a workable structure and it isn't some dark secret. I'm willing to bet, however, that if offered the same tax structure the renewable energy crowd would scoff at it, preferring instead the current program of true subsidized production where they can pay consumers to use their shitty, intermittent, and overpriced energy product. Thus betraying the lie that the NRDC or renewable sector give two tinker's shits about the American consumer or American competitiveness in the global economy.
You've been pwned.
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