U.S. Senator John Cornyn, a Republican, has written an article in Chron.com
stating that raising oil-industry taxes might lead to a substantial loss of Texas jobs.
According to Cornyn, the oil-and-gas industry helps power the U.S. economy, especially in Texas. More than 300,000 Texans work in the industry. They generate nearly 7 percent of the wages in Texas, despite being only a little more than 3 percent of the entire workforce.
Cornyn says that more than 90 percent of the wells in the United States are operated by small and independent businesses, and even the major energy companies rely on small businesses as suppliers and contractors. Together these workers and businesses help reduce dependence on foreign oil and contribute to the diversity of energy resources needed for decades to come.
Domestic oil and gas production is part of America's energy solution, but many in Washington see the industry as part of the problem. As a member of the Senate Finance Committee, Cornyn says he heard the Obama administration testify this month that the domestic oil-and-gas industry actually reduces long-term energy security. Cornyn believes that in their view, the industry is guilty of overproduction, at a time when 60 percent of U.S. oil comes from foreign sources.
To tackle overproduction, Cornyn says the White House wants to repeal nine oil and gas incentives that encourage entrepreneurs to develop America's natural resources and create new jobs. By doing so, the administration would impose more than $30 billion in new taxes over 10 years.
Cornyn believes Texans would pay the biggest share of that bill, and that some might pay by going out of business. For example, independent refineries must make the same large capital investments as their global competitors, while operating on much thinner profit margins. Raising taxes now could end their ability to compete and send more Texans to the unemployment line.
Cornyn thinks higher taxes would cost jobs in Texas and weaken America's strategic position overseas. He feels that the less oil and gas produced here, the more dependent we are on foreign suppliers. He also thinks that no matter which suppliers we choose, unfriendly regimes like Iran and Venezuela would claim a larger share of the global energy market.
In addition, Cornyn says that U.S. private businesses would be further disadvantaged compared to their state-owned competitors, such as Russia's Gazprom and Brazil's Petrobras.
Cornyn firmly believes that raising taxes on oil and gas producers won't produce the return Texans want. Instead, it would only weaken our energy security, force many businesses to close or lay off workers and lengthen the longest and deepest recession in a generation.
Labels: texas jobs