If the U.S. continues to increase the tax rates on big oil companies, then they are going to have no choice but to look elsewhere to make capital investments to continue to make the profits needed to fund new oil exploration efforts and refinery upgrade.
Right now, most of these efforts have focused in the Gulf of Mexico, Texas and Alaska. However, with the new Alaska tax structure and the coastal states looking to profit from these new finds, it is going to put a big strain on these companies to continue to invest the type of money needed to build up our American oil structure so we will not be as dependant on imported oil.
The proposed Alaska changes in the tax law could have effects on domestic oil supply, changes that increase the taxation on income from marginal oil and gas investments will discourage domestic oil and gas production. To the extent that domestic oil production would be reduced, the United States would have to import more of its oil. As long as we are depending on these imports, our fuel prices will always be like a yo-yo up and down.
Instead of these states just focusing on the oil companies, they should be looking for better ways to manage the money that they already are getting from these companies. In addition, they should try to make it more attractive for other industries to move into their area.
Personally, I would like us to stop depending on imported oil all together and start standing behind our hard-working people who work in some of these very harsh environments trying to make sure that we have the fuel resources we need here in America.
We all might want to think hard before raising taxes on these companies. How would you like it if your taxes went up every year? I know I would not like it.
Peninsula Clarion ©2013. All Rights Reserved.