Proposals being considered in Congress to raise taxes on energy and petrochem companies likely to hurt Americans

08-Nov-11

National Petrochemical & Refiners Association President Charles T. Drevna has said that proposals being considered in Congress to raise taxes on companies that produce oil and natural gas and that manufacture fuels and petrochemicals would hurt the nation and the American people. "These tax increases would hurt American consumers and employers by raising the costs of driving, raising the costs of manufacturing and transporting products, and raising the costs of operating businesses. They would make it harder for American oil and gas producers and fuel and petrochemical manufacturers to compete with foreign rivals on a level playing field. This would wipe out jobs, weaken our economy and increase America's reliance on foreign oil, fuels and petrochemicals. Instead of increasing the amount of tax revenue collected, these tax hikes would actually decrease tax collections because they would reduce the amount of fuels, petrochemicals, oil and natural gas produced in the United States," he added. Drevna said:The oil and gas sector pays income taxes, royalties and other fees to all levels of government totaling nearly US$86 mln every day – about US$31 billion a year. * Fuel and petrochemical manufacturers and oil and gas producers paid an effective income tax rate of about 41% in 2010 – compared with 26.5% for other U.S. industrial companies. * The oil and gas sector is the largest private sector source of revenue to the U.S. Treasury. In 2010, companies in this sector paid more taxes per company than any other industry. * Companies in the American oil and gas sector earned 5.7 cents/every dollar of sales in 2010 – compared with an average of 8.5 cents for other American manufacturers. "American oil and gas sector companies don't receive and aren't seeking subsidies or special tax breaks," Drevna said. "They simply want the same tax treatment that other U.S. companies already receive so they can compete with foreign companies and provide jobs to Americans. Instead of demonizing and vilifying American manufacturers of proven and reliable fuels and petrochemicals – along with the workers who make these vital products – policymakers should join us in working to best serve the American people and preserve and create jobs."