Oil company CEO’s are being hauled before Congress today for their annual “perp walk.” (Technically, they will be addressing The U.S. Senate Committee on Finance on “Oil and Gas Tax Incentives and Rising Energy Prices.”)
I have obtained the testimony of Chevron CEO John S. Watson who will be defending the industry. Watson is expected to say that “few businesses pay more in taxes than oil and gas companies.” As evidence, he will note that “The worldwide effective tax rate for our industry in 2010 was about 40% – that’s higher than the U.S. statutory rate of 35% and the rate for manufacturers of 26.5%.”
But the real story here may be that he will publicly argue ending tax credits for the oil industry will lead to less jobs and less energy at a time when America is struggling economically. On that topic, Watson will say:
Tax increases on the oil and gas industry – which will result if you change long-standing provisions in the U.S. tax code – will hinder development of energy supplies needed to moderate rising energy prices. It will also mean fewer dollars to state and federal treasuries…and fewer jobs – all at a time when our economic recovery remains fragile and America needs all three.
…Allow us to develop our nation’s vast energy resources. And strengthen, don’t weaken, our ability to compete against large national oil companies who are major players in the U.S. and global energy markets.
…But it is wrong to increase taxes on oil and gas companies to subsidize other forms of energy. This is also likely to have serious unintended consequences for production, jobs and tax revenues.
You can read his full statement here.