CAP Critique Ignores Facts, Obscures Reality on Energy and Taxes
It’s becoming a quarterly tradition as reliable as the seasons: the oil sector releases its earnings, and the Center for American Progress contorts itself into a misleading critique of the industry, its tax treatment, and its outsized role in the American economy. Unfortunately, repetition has not made CAP’s argument any more factual, any more persuasive, or any more founded in the common sense tenets that make for sound energy and tax policy. The crux of CAP’s argument is, as ever, that the oil and gas industry’s earnings are too high. And because of these high earnings, the oil and gas industry should be taxed more heavily. They assert that the oil sector fails to carry its share of the burden, that it is a drain on the economy, and that policymakers should act in a manner that artificially shifts the American energy portfolio away from traditional fossil energy and toward preferred, “green” energy projects. Not a single aspect of this line of reasoning holds water. Earnings, Expenses, and Returns Let’s start with the earnings. Earnings in 2013 for the “Big Five” oil companies clocked in at $93 billion – an objectively large number, but around thirty percent lower than last…