Treasury Secretary Tim Geithner wants to take away tax breaks for oil and gas companies because they contribute to global warming.
Reuters reported that Geithner told the Senate Finance Committee on March 4 that,
“We don’t believe it makes sense to significantly subsidize the production and use of sources of energy (like oil and gas) that are dramatically going to add to our climate change (problem). We don’t think that’s good economic policy and we think changing those incentives is good for the country.”
I’m not for the government subsidizing anyone, but Geithner’s statement indicates that the Obama administration is starting its long-promised attack on the oil and gas industry. Their tax breaks apparently are first. Are profits next? Since last summer, Obama has been saying that he would impose a windfall profits tax on oil companies.
A recent study by CRA International commissioned by the American Petroleum Institute concluded that a windfall profits tax likely would:
- Cause a net loss of up to 490,000 U.S. jobs by 2030.
- Reduce U.S. gross domestic product by roughly 1 percent, or $240 billion by 2030.
- Increase U.S. imports of crude oil by up to 18 percent in 2030 and reduce U.S. domestic production of crude oil by up to 26 percent in the same year.