Wednesday’s sharp words weren’t the first time President Obama has targeted ExxonMobil. What was different was the way he opened his criticism.
Despite the fact that ExxonMobil receives no special tax treatment, the president claimed that it “would actually help the economy“ if the government were to end the “corporate welfare” he says ExxonMobil, in particular, receives. I want to address both parts of the president’s comment.
With the U.S. economy continuing to struggle, it is more important than ever for our country to come together to discuss the best ways to boost the economy and help the more than 23 million Americans who are unemployed or under-employed.
Punishing the U.S. energy industry is not the way to do it.
As I wrote a few months ago, our economic contributions are significant and far-reaching – and they’ve been vital to keeping the economy moving during challenging times:
In 2011 alone, ExxonMobil contributed $72 billion to the U.S. economy through activities including taxes, salaries, returns to our investors and payments to other businesses and industries to keep our U.S. operations running. That’s an average of almost $200 million per day pumped into the U.S. economy, and it doesn’t even include the indirect effect of such spending. The cumulative effect of U.S. oil and natural gas activities accounted for more than $1 trillion of value added to the U.S. economy a year, and about 7.7 percent of U.S. GDP, according to latest data available.
Some may feel there are political reasons for singling out the oil and gas industry for punishment, but there aren’t good economic ones. By seeking to remove standard tax provisions available to all other manufacturers and producers, the policy being suggested by the president and some others would undermine one of the few sectors of our economy that has been investing in America and creating jobs.
The second part of what the president said also deserves attention because it is repeated so frequently despite being incorrect. The president continues to call for the elimination of what he (mistakenly) terms industry “subsidies.”
The simple fact is that these are legitimate tax provisions covering a variety of industries. In fact, integrated oil and gas companies like ExxonMobil receive less favorable tax treatment than others within our own industry and as compared to other industries.
So you can see why we find it surprising – and disappointing – when politicians continue to make this inaccurate claim that “Big Oil” is receiving special tax subsidies that no one else gets. To make them available to everyone except oil and gas producers is tantamount to levying special, punitive taxes on companies like ours.
Having government try to pick winners and losers never helps the economy. Instead, eliminating these provisions will raise energy costs, reduce investments in new technologies and make it more difficult to produce the energy supplies critical to America’s economic future.
It’s hard to fathom how punishing that activity could help the U.S. economy.