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Despite their international presence, U.S. oil and natural gas companies still directly employ millions of U.S. workers, invest heavily in the United States and pay valuable dividends. Therefore, substantial foreign earnings are constantly returned to this country and put back into the economy. This revenue flow is dependent upon the United States recognizing that, because the income has already been taxed abroad, it should not be taxed again upon repatriation. However, the administration and some in Congress have proposed raising taxes on U.S. companies’ foreign earnings, further undermining U.S. competitiveness abroad and potentially limiting the availability of future reserves.
U.S. oil and natural gas operations are intricate and complex, but the facts are simple: America’s oil and natural gas industry supports 9.2 million jobs throughout the economy and 7.5 percent of our GDP. Its companies provide higher-than-average wages — approximately $98,000 a year for an upstream job — and help ensure our nation’s energy security. In the process, they generate tax revenues from operations and sales of products that contribute billions every year to federal, state and local governments.
Contrary to what some political pundits may say, major energy producers are paying their fair share.
Brian Johnson is the senior tax advisor for the American Petroleum Institute — a trade association representing over 470 oil and natural gas companies. Visit www.api.org for more information. This is the first of a two-part series.