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American Petroleum Institute Senior Tax Advisor Brian Johnson on whether the government should end tax breaks for oil companies.
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Staying with oil here -- the question is should big oil keep getting the tax breaks and they currently have the industry got more than two point six billion dollars.
And tax incentives in 2010.
And lots lawmakers are crying -- even some Republicans the Treasury Department says ending the incentives could bring in an extra forty billion dollars in revenue.
Over the next ten years.
-- at what cost for more I'm -- Brian Johnson -- tax advisor for the American Petroleum Institute.
Thanks so much for joining us you know one thing that that sort of drives me crazy whenever people have these discussions and in fact it was brought up during -- debate.
Is that companies don't pay taxes people do so -- -- raise the taxes on oil companies they just -- over the consumers that's me you're gonna see it at a pop.
Everyone out there who drives -- -- average American gets fat.
You know I think the average American does have an understanding of these issues I mean the facts remain that every single day the oil and natural gas industry pays -- federal government 87 million dollars.
That's rents royalties leases bonus payments and income tax payments.
We support nine point two million jobs eight percentage GDP a huge part of the economy and we are investing in American infrastructure we are paying our fair share.
We have an effective tax rate of over 40% even that's more than many other industries.
What do you think that ending these deductions we do for the price of gas at the -- Why soon you're talking about the context of tax reform any examination of these deductions and I'm glad you did say that they are not credits they are not subsidies -- their business deductions any examination of those.
Outside of tax reform is simply a tax increase in that would result in.
Jobs.
Barrels of oil production per day of all -- set -- up.
In the context of tax reform united -- industry is supportive and sees the value of a lower tax rate.
However we are concerned about the base for owners in getting there there are base for -- -- that domestically could hurt our cash flow and that impact could result in less production less jobs.
And so we're certainly willing to have that discussion with lawmakers yet.
-- rising big oil it's easy you know it's like bill and rising at private equity or the top 1%.
In Mitt Romney battled back against that during the first debate -- plant some right for you and ask you about on the other side.
The Department of Energy has said the tax breaks for oil companies is two point eight billion dollars a year.
And it's actually an accounting treatment as you know that's been a place for a hundred years now time limit.
And and in one year you provided ninety billion dollars in breaks.
To the green energy world.
Now I like green energy as well but that's about fifty years worth of what oil and gas -- So proportional basis I mean that's two point six billion vs ninety billion now are breathing -- crunch those numbers and we found that they got to that number by lumping in the money.
That was given to green energy through the stimulus so it's not really an apples to apples comparison it is still apples to oranges but at the same time.
It's all my money I mean it's all tax dollars revenue that's taken him from the government that's being sent back out.
No you disagree -- not not not with our industry and all our industry is not receive credits.
Grants -- checks we benefit from deductions which lowers our taxable burden.
There is -- transfer of money.
If we're talking about the stimulus package.
Let's look at a number in 2009.
The oil and natural gas industry invested 470.
Billion dollars.
In the economy that's half the stimulus package without involving the government.
We're an industry that's bringing new technology that's bringing you the shell development we saw earlier.
Now would you rather our industry invest some money in the economy or the people who brought you the DNV the post office.
And things of that nature you know -- pay on average every year 32.
Billion dollars to the federal government if you believe.
If you believe some of the rhetoric about two point eight billion eggs that are I don't know how they get those numbers at some government math but 32 billion a year going -- -- two point eight going out if you believe in that.
That's a great return on investor that's -- bet -- make in Vegas any day.
But what do they change started the image around America of green energy good.
Big oil back I mean this is sort of admit that characterization to -- -- -- however you want to describe it.
That is being perpetuated.
Time after time had change that.
You know the good bad -- I don't think we should think -- things in those terms know America's oil and natural gas industry constantly supports green energy.
Supports renewables we invest more in alternative energy and -- projects in the private sector and the government provided.
We are on the cutting edge of these technologies and we're going to continue to do that we -- fallen in all of the above energy solution which doesn't mean picking good or bad or winners and losers.
-- thanks for coming on the show.
No problem --
