Economic Consequences of Higher Taxes

The Administration has proposed over $90 billion in
additional taxes and fees on the oil and natural gas
industry over a 10-year period. According to the
Congressional Research Service, the proposals “…
would make oil and natural gas more expensive for U.S.
consumers and likely increase foreign dependence.”4

In the long run, the negative economic consequences of
higher taxes more than offset any short-term tax revenue
gains. An additional $5 billion in new, annual taxes –
similar to what’s been proposed by the Administration, or
some in Congress – could actually decrease cumulative
government revenue by $29 billion by 2020 according to
an economic analysis by Wood Mackenzie.5 And even
worse, higher taxes could result in the loss of tens of
thousands of jobs between now and 2020.

There is a better way than saddling a troubled economy
with new taxes and fees that hurt consumers and
workers. The oil and natural gas industry should be
allowed to develop the vast energy resources that
belong to the American people. If we open areas that
are currently off-limits to development, and partner with
Canada to develop resources, we could create more than
one million jobs throughout the economy and generate an
additional $127 billion in government revenue by 2020.6

We can either take momentum away from recovery or
put it behind American prosperity.

4 CRS Report to Congress, “Oil and Natural Gas Industry Tax Issues in the FY2012 Budget
Proposal,” March 3, 2011.

5 Wood Mackenzie, “Energy Policy at a Crossroads: An Assessment of the Impacts
of Increased Access versus Higher Taxes on U.S. Oil and Natural Gas Production,
Government Revenue, and Employment,” January 2011.

6 Wood Mackenzie, “U.S. Supply Forecast and Potential, Jobs and Economic Impacts
(2012-2030),” September 7, 2011