A study conducted by the Department of Interior revealed that when combining the U.S. tax policy with royalty fees, only Venezuela takes more money from domestic oil producers. The report, released earlier this week, debunks a brief written by the Government Accountability Office.
Both pieces discuss the results of a fluctuating tax policy. When comparing the GAO’s 40-page brief to the departments 300-page study, it is apparent that the results are notably different.
The GAO brief concluded that the U.S. government provides an attractive business climate, but it only measured royalties and neglected to measure corporate tax.
The Department of Interior strongly disagrees with GAO’s findings, writing that the GAO’s attempt to guide tax policy by quantifying a “fair share” tax on oil producers “needs comprehensive reassessment.”
Nearly 64 percent of the revenue from oil producers in the Gulf of Mexico is marked for either income or royalty tax, according to the study done by the Department of Interior.
The government’s take in domestic oil revenues varies seasonally. When oil prices are high, the corporate tax is the main source of earnings for the government. When oil prices are low, royalties generate the most revenue.