The Administration’s proposal to eliminate the ‘dual capacity’ rule for American energy firms is the wrong path during this economic downturn. Its elimination would effectively double-tax our domestic oil and natural gas producers on foreign income earned. The top ten energy companies are state-owned companies from China, Iran, Venezuela, Libya, Algeria, and Russia and this double income tax proposal puts us at a competitive disadvantage against these state-run competitors to secure energy sources.
A new report by IHS Cambridge Energy Research Associates undertaken in conjunction with Deloitte, found that “[T]he costs of repatriating profits from international operations back to the United States is higher than many of its chief competitors…” and that “[W]hen oil and gas companies are successful overseas, their home countries benefit from greater sense of energy security [and] increased employment…”
We need tax policies that encourage economic stimulation, not new taxes that force job cuts while exposing Americans to higher energy prices. The industry supports 190,000 Colorado jobs, adds $24.1 billion to the state’s economic output and pays over 90 percent of the severance taxes.
Director of Policy
Colorado Oil & Gas Association