Oil Man Proposes Increase In Oklahoma Oil-and-Gas Tax 182
Hugh Pickens DOT Com (2995471) writes "Daniel Gilbert reports at the WSJ that Oklahoma oil man George Kaiser is breaking with fellow energy executives in asking the state to raise taxes on oil companies, including his own. 'Oklahoma is in desperate financial circumstances,' says the billionaire who controls Kaiser-Francis Oil Co. Kaiser says a higher tax on oil-and-gas production could help the state pay for education and much needed infrastructure improvements, and is asking legislators to return the state's gross production tax to 7 percent, challenging a plan proposed by fellow oil company executives who want to see the rate settle at 2 percent for the first four years of production.
Several energy companies and the State Chamber of Oklahoma say that lower tax rates for the costliest oil and gas wells are necessary to continue drilling at a pace that has stimulated economic activity and created other sources of revenue. Berry Mullennix, CEO at Tulsa-based Panther Energy, credits the tax program for helping his company grow to more than 90 employees, up from 18 a few years ago. 'I would argue the tax incentive is a direct reason we have so much horizontal drilling in the state today,' Mullennix says ... When companies decide to drill a well, they make their best guesses on how much it will cost to drill the well, how much the well will produce and what the commodity price will be. All of those estimates can vary widely, Kaiser says. 'With ad valorem taxes, the difference among states is 2 or 3 or 4 percent. The other factors can vary by 50 or 100 percent.' Compared with those other factors, Kaiser says the tax rate is incidental. 'It's a rounding error.'"
Several energy companies and the State Chamber of Oklahoma say that lower tax rates for the costliest oil and gas wells are necessary to continue drilling at a pace that has stimulated economic activity and created other sources of revenue. Berry Mullennix, CEO at Tulsa-based Panther Energy, credits the tax program for helping his company grow to more than 90 employees, up from 18 a few years ago. 'I would argue the tax incentive is a direct reason we have so much horizontal drilling in the state today,' Mullennix says ... When companies decide to drill a well, they make their best guesses on how much it will cost to drill the well, how much the well will produce and what the commodity price will be. All of those estimates can vary widely, Kaiser says. 'With ad valorem taxes, the difference among states is 2 or 3 or 4 percent. The other factors can vary by 50 or 100 percent.' Compared with those other factors, Kaiser says the tax rate is incidental. 'It's a rounding error.'"
Re:Everyone prepare for Armageddon! (Score:5, Informative)
Actually, George Kaiser is Tulsa's largest philanthropist (perhaps in Oklahoma)
he's donated millions to Tulsa's park system.
Including at least a $100 million for a park project that begins construction this year
http://agatheringplacefortulsa... [agathering...rtulsa.com]
Re:Idle threats (Score:4, Informative)
Uhh huh
http://www.alternet.org/corporate-accountability-and-workplace/16-giant-corporations-have-basically-stopped-paying-taxes
"General Electric: The worst tax record over five years, with $81 billion in profits and a $3 billion refund.
Boeing: In addition to receiving a refund despite $21.5 billion in profits, the company ranked high in job cutting, underfunded pensions, and contractor misconduct.
Exxon Mobil: Made by far the largest profits in the group, but paid less than 1% in U.S. taxes, and yet received oil subsidies along with their tax breaks. Unabashedly reports a 2012 "theoretical tax" of over $27 billion, almost 90% of its total income tax expense. The company was also near the top in contractor misconduct.
Verizon: Second worst tax record, with a refund despite $48 billion in profits.
Kraft Foods: Received a refund from the public despite $13.5 billion in profits. Also a leading job-cutter.
Citigroup: One of the five big banks who are estimated to get a bailout/refund from the American public amounting to three cents from every tax dollar.
Dow Chemical: Received a refund despite almost $10 billion in profits.
IBM: Paid less than 3% in taxes while ranking as one of the leading job cutters, and near the top in contractor misconduct.
Chevron: In addition to a meager 4.3% tax rate and a share of oil subsidies, the company has been the main beneficiary of tax-exempt government bonds."
Wheres my $3 billion refund?!?
Re:Oil Man wants more money? (Score:2, Informative)
Prices are not affected by this type of ad volorem tax. The theory, at least, is that prices are set by competition and corporate tax rates do not enter into it.
As Republican Bruce Bartlett (Reagan Administration, George HW Bush Administration, staff of Jack Kemp and Ron Paul) reluctantly admits:
The owners of capital are the ones who pay corporate taxes, not consumers.
Now it's a moving target, because our corporate laws give lots of leeway to corporations to try to shift those costs to workers and consumers, so the level is always a moving target. Corporate tax rates are not "set and forget". If you're going to minimize companies externalizing their costs onto the citizens, you have to constantly fiddle with those rates, which is something that has Congress is willing to do in the era of big money politics.
Re:that new new... (Score:4, Informative)
No, he's the opposite of Limbaugh -- he's a philanthropist.
He was listed as the third largest donor behind Warren Buffett and Bill and Melinda Gates in 2008. He's also taken the Giving Pledge to give away half of his wealth to charity. The George Kaiser Family Foundation gives millions to the causes of education, child poverty, and community health services.
He's been proposing eliminating tax breaks for oil and gas companies for years. He would rather the money go to health and education.
He's not using this as a political stunt, he's willing to put his money where it counts instead of just being a blowhard like Limbaugh.