December 9, 2014 The Oklahoman Editorial Board: Associated energy taxes have kept Oklahoma’s government afloat during and since the national recession. A report commissioned by the State Chamber Research Foundation found the energy industry is the single largest contributor to state revenues, providing more than $2 billion (about 22 percent of state collections). In short, Oklahoma’s oil and gas companies are already paying their “fair share” of taxes — and then some.
Calls to further raise taxes on the energy industry ignore the above-noted facts, as well as market reality. In June, after this year’s legislative session ended, oil hit a high of $112.12 per barrel. It has since fallen below $70. That alone is likely to curtail some drilling. If you combine lower profits with higher production costs by raising taxes, even fewer wells will be drilled in Oklahoma; even fewer jobs will be created or preserved.
In the same Oklahoma Watch article, Rep. David Dank, R-Oklahoma City, spoke against revisiting the gross production tax rate. “What’s more important to me than the gross production tax is the high-paying jobs that are created in the Devon Tower, by Continental, by Sandridge, by Sampson, by Chesapeake,” Dank said.
Dank has been the Legislature’s foremost advocate of eliminating special interest tax breaks that don’t generate economic growth. He was among those who suggested during the 2014 session that a higher gross production tax rate was feasible. Thus, his opinion that the issue is now settled should carry some weight.
Tax policy discussions should focus on fostering more economic growth, not on penalizing growth where it exists.