Matt-33-205 t1_iu2sxae wrote
Reply to comment by sushimonster13 in Pa.’s natural gas industry set to get billions in state tax credits - The Allegheny Front by jayjaywalker3
One thing I've noticed about those on the left, not necessarily saying you, but it doesn't really compute with some that lowering tax rates can actually increase total tax revenue. This fundamental principle is lost on many, in particular when it comes to energy companies.
A simplistic and exaggerated example, 10% of $1 billion dollars is a heck of a lot more tax revenue than 90% of $1 million. Taxation on energy is passed on to the consumer, so if energy prices are low, what incentivizes big energy companies to maintain profit is to produce more and bring more energy to the market.
My point being, there is definitely a point of diminishing returns when it comes to taxing business. If they have incentive to produce more, by allowing them to keep more of their revenue, everybody can win. The goal should be to find that equilibrium tax rate, not just to automatically assume increasing taxes on energy companies will result in more revenue for the government. Energy companies typically pass increased taxation onto the consumer. That's who gets hurt, the consumer.
I've read through numerous economic studies on poverty. There is one overwhelming factor relating to poverty, countries with the highest poverty rates have the least economic freedom. Countries with the lowest poverty rates have the highest economic freedom. Economic freedom being the absence of onerous government regulation and taxation.
sushimonster13 t1_iu6af74 wrote
The one assumption that you're making though is that all that money is going towards operations and not towards stock buy backs and other things that impact short term profitability. With private equity leeching into the private sector, there no longer is an incentive to remain profitable for the duration. Why spend 10 billion on operations when you can spend 3 billion on stock buy backs and somebody will take you private and make you rich.
I agree that you can't over tax businesses because they might just leave or become unsustainable ( china being a good example of government going to far ) but everyday consumers are struggling as well and they're the backbone of the entire economy. They need a break more than some natural gas company that may trickle down some benefits to the common folk.
Matt-33-205 t1_iu6ife4 wrote
I suppose we just fundamentally disagree. It's not an assumption, it's a certainty, if taxes are increased on energy companies, those taxes are passed along to the consumer in higher prices.
Additionally, the current Administration has created an environment that is very unfriendly, bordering on hostile, toward fossil fuel companies. The energy companies are reluctant to invest in expensive infrastructure improvements and expansions, when government can pull the plug at any time on permitting, such as Joe Biden did with the Keystone XL Pipeline his first day in office.
Bottom line, I'm not just giving talking points, this is real life stuff. Most people have no idea just how close we are to an energy catastrophe. Diesel Supply in the United States hasn't been this low in decades, and if those trucks stop moving, all hell will break loose in a few days.
Our government should be fostering an energy friendly business environment, it's cool to support green energy, but the problem is supporting the green movement while demonizing fossil fuels. The transition is going to take generations, it's not going to happen overnight. If everyone in the United States bought an electric car tomorrow, it would crash the electrical grid in this country. We need to be building new oil refineries, encouraging continued safe drilling and hydraulic fracturing with oversight, and do whatever is needed to ensure our own energy independence
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