Oil Hearing: When Government Targets Companies for Taxes
From today’s Senate Finance Committee festival of finger-pointing, “ Oil and Gas Tax Incentives and Rising Energy Prices,” a serious observation from Rex Tillerson, Chairman and CEO of Exxon Mobil:
It is important to make clear that tax provisions such as the Section 199 Domestic Production Activities deduction are not special incentives, preferences or subsidies for oil and gas, but rather standard deductions applied across all businesses in the United States.
Section 199 applies today to all U.S. domestic producers and manufacturers from newspaper publishers, to corn farmers, to movie producers, and even coffee roasters. All can claim this deduction, which is intended to support job creation and retention in the United States….
Frankly, to then deny a select few companies within the oil and gas industry this standard deduction is tantamount to job discrimination. Why should an American refinery worker employed by a major U.S. oil and gas company in Billings, Montana, be treated as inferior to an American movie producer in Hollywood, an American newspaper worker in New York, or an employee at a foreign-owned refinery in Lemont, Illinois?
That’s a good topic of a hearing: “Respecting the First Amendment: Ending Subsidies for Big Newspapers.”
Any Senator who labeled the current tax treatment of oil and gas producers a “subsidy” today clearly knows better. If translated into policy, this kind of cynical populism makes the United States less competitive and discourages job creation.