Obama’s State Of The Union Call For Oil Tax Hikes Ought To Send A Chill Down The Spines Of North Dakotans

During his State of the Union speech tonight Obama called for tax hikes on oil companies. From the transcript:

At the California Institute of Technology, they’re developing a way to turn sunlight and water into fuel for our cars. At Oak Ridge National Laboratory, they’re using supercomputers to get a lot more power out of our nuclear facilities. With more research and incentives, we can break our dependence on oil with biofuels, and become the first country to have 1 million electric vehicles on the road by 2015.

We need to get behind this innovation. And to help pay for it, I’m asking Congress to eliminate the billions in taxpayer dollars we currently give to oil companies. I don’t know if you’ve noticed, but they’re doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.

Obama also called for America to get 80% of its power from “clean energy” sources by 2035. Right now, America get’s 50% of it’s electricity from coal, and pretty much all of its transportation fuel from oil. To hit 80% in even 25 years, in the absence of an unforeseen technological breakthrough, we’d have to bankrupt ourselves.

It’s worth noting that the only state in the country to have truly thrived despite the national recession is North Dakota. And the only reason North Dakota was able to skip the national recession is because we have an on-going oil boom.

One constant damper on the national economy is the government’s push back against the production of cheap energy from fossil fuels, including oil. Not only does this drive energy prices needlessly higher, it kills all the jobs these oil companies create. Increasing taxes on oil companies is only going to drive fuel and energy prices even higher, and kill more jobs in the energy sector.

Here in North Dakota we are having a statewide debate about simplifying our state-level oil extraction tax. It’s something former Governor Ed Schafer has been touring the state pushing. With Obama clearly intent on pushing for punishing new taxes on the oil industry at the national level, North Dakotans should think long and hard about defending the oil industry in our state and all the job-creation, prosperity and tax revenues it has been driving.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • I H8 GOPers

    It is insane to give money (tax cuts) to Big Oil while they are making record profits. What good is an oil boom if it only benefits Big Oil and hurts other areas of the economy? Don’t bother arguing, Big Oil profits at the detriment to the rest of our economy is NO GOOD.

    • http://sayanythingblog.com Rob

      It’s ludicrous to suggest that the oil boom hasn’t helped every single
      resident of this state.

      • borborygmi

        And that would be at the current rates. Thanks Rob for proving the point

      • I H8 GOPers

        You lie. There are people and townships and people in townships who will not benefit, especially if your bosses get their way.

    • robert108

      Why do you keep parroting that lie that reducing tax RATESs is giving money? It is allowing those who earned the money to keep more of it, rather than having it confiscated by obama’s greedy govt.
      You also keep parroting the Marxist lie that profits are a detriment to anyone. Profits ARE economic growth, which benefits everybody, even tax-hungry Dem politicians.

      • Bat One

        He/she does that because like all arithmetic-challenged, economics-illiterate liberals he/she believes that all wealth, and those who create it, belong to the federal government.

    • http://ndgoon.blogspot.com Goon

      Do you realized that Oil Companines only make about 4% – 8% profit because of taxation and you’re full of s#it…

      • I H8 GOPers

        Record profits, my challenged friend. This cannot be argued.

        • NDSuperman

          So I’m supposed to understand that:
          Profit = Evil
          and therefore:
          Great Profits = Great Evil

          • I H8 GOPers

            No. Record profits = no tax cuts and no subsidies.

          • http://sayanythingblog.com Rob

            Right. How dare people run their businesses profitably to the benefit of themselves, their investors and all they employ!

            Down with profits! Of course, that means down with prosperity, but so what because we hate big oil!

          • NDSuperman

            OK…here is my problem with your statement. “Record profits,” assuming it is true, only means that the company did better in 2010 than they did in 2009, which was likely better than their fiscal 2008, and so on. This would be a very good thing and ought to be lauded and encouraged. Great profits…or windfall profits, may appear on the surface to be a company holding the consumer hostage, but it is actually a very vital social function. These types of profits expose unmet human needs. Other companies see this and want in on the action. The end results being more companies involved in the market = greater competition = better price = better product. That is, of course, if the government keeps taxes low…and stays out of the way in general.
            I’m with on subsidies however…in all industries…they must stand on their own.

    • Res

      why don’t we take all oil taxes from the government an then see them cry be cause they don’t have enough money for there pets things to do

  • mikemc1970

    Increasing taxes on job creators is just the sort of “solution” you can expect from a progressive like Obama.

  • sbark

    The same tax credit given to the end of the road gravel pit farmer………the depletion allowance……..is the one the Left wails about on the Big oil Company…….

    ……basically isnt that when a Oil company or Gravel pit owner pays good hard money to devielop a parcel of land with the resource on it, they estimate the reserves, and get to deduct a portion of the reserves as they “deplete” them……….

    is the left saying the Oil companies that buy land to develop………shouldnt get a basic deduction?

    maybe the Left just wants them to pay taxes on Gross income? ……..it appears companies are hoarding cash for a good reason does it not?

  • http://ndgoon.blogspot.com Goon

    Hellow 5.00 a gallon gas. Thanks to Obumble.

    • borborygmi

      If ND lowers the tax down to Montana’s rate what would the break even point for cost/barrel for oil companies be then? Someone must have that number. It hasn’t been given out or I just plain missed it. Anyone?

    • I H8 GOPers

      The record high (national average) happened under Bush. Y R U Sofa King dum?

  • borborygmi

    What billions of taxpayer dollars are we giving Oil Companies?

    • robert108

      The oil companies are the source of billions in tax revenue, both directly and indirectly.

      • Bat One

        And sales tax revenues. And employee income tax revenues. And Social Security tax revenues. And Medicare tax revenues. And unemployment insurance tax revenues. And capital gains tax revenues from those of us shrewd enough to buy shares in the companies…

        • borborygmi

          so what billions are we giving to the Oil Companies

        • robert108

          The workers who are paid by the profitable companies also consume more stuff, which is what snowbama and his gang thinks makes the economy go.
          Did you get the statist message in his story about removing the engine from the airplane as it was taking off? He thinks that govt spending is the engine of our economy, like the Marxist he is.

        • Ralph Kingsbury

          and those of us even shrewder enough to oil royalties. and yes today’s market can stand today’s tax levels, but what do you think will happen will oil drops back to $50, or even $40, and it will as all commodities do over time. Watch what happens to ND when oil is $50 and wheat is $4. Move over Mn.

      • I H8 GOPers

        Yup. And even with that, they are making record profits. Sounds like a win-win. Let’s not cut their taxes and upset the applecart.

        • robert108

          You say “record profits” like it’s a bad thing. All profits are a good thing: greedy Dems get more tax revenue, the people in the private sector that actually make this country go get more money, more jobs are created, and the investment cycle keeps going and creating more prosperity for all Americans.
          You must be a profit-hating Marxist, hater.

        • robert108

          The real win/win is reducing marginal tax rates; more production, more profits, more economic growth, more jobs, more money for local business, more money for housing and consumer goods, and more tax revenue for the greedy obama gang. Raising marginal tax rates is bull goose loony.

    • http://sayanythingblog.com Rob

      We’re not giving the oil companies anything. Unfortunately, liberals like you classify letting them keep their own money as subsidy.

      • $8194357

        Communists believe that it all belongs to “mother” russia. The eliet need to be in charge of doling it back out in miniscule peices back to the commoner, no?

      • Dakota

        Unless you’re a farmer.

    • http://www.twitter.com/dakota_mel Dakota_mel

      I’m with you. I read that and my first thought was we’re giving subsidies to oil companies? I didn’t know that. I wonder what they are for. (fortunately, my thought processes eventually go deeper. That’s why I’m not a liberal.)

      But, if the rest of the comments on this thread are any indication it’s the old double-speak. It’s not subsidies but legitimate tax cuts – and probably ones that all companies get.

  • WOOF

    When the oil companies finish taking all of North Dakotas oil and fkking the state in the ass, they won’t even have the goddamn common courtesy to give North Dakota a reach-around.
    They’ll slip out at night, leave the land and the water poisoned and you won’t get a valentine.

    • http://sayanythingblog.com Rob

      In the next two years the direct taxes paid by oil companies in ND is expected to hit $2 billion. That’s about 25% of our 2009 – 2011 biennium budget.

      And that’s not counting all the indirect taxes the oil boom is driving such as growth in incomes, growth in sales tax receipts, etc.

      We’re not getting “f*cked* as you put it.

      • I H8 GOPers

        Yes, yes we are. You just don’t know it because donations to the NDGOP has the same effect on you as GHB.

        “If it’s inevitable that Hamm is gonna pork you, just lay back and take as much enjoyment as you can.” Well that’s for losers and GOPers, but I repeat myself.

      • borborygmi

        yet they are drilling still. Hamm said that $60 is break even on Bakken Oil. If we reduced the tax by half what would the break even point be?

  • $8194357

    Another chance at another pep rally? Here’s what Jefferson thought about the state of the union address and so did everyone else for 112 years……..

    Quote:
    So how did we arrive in today’s media-hyped, Internet downloadable, theatrical State of the Union address?

    What You May Not Know about the State of the Union Address:

    • President Woodrow Wilson controversially revived George Washington’s spoken precedent by delivering his annual message to Congress in person in 1913. He set today’s oral tradition.

    • When Calvin Coolidge’s 1923 annual message to Congress was broadcast on radio, for the first time Americans could hear the speech instead of just reading about it in the newspapers. Silent Cal wasn’t so silent any more.

    • Franklin Roosevelt began calling the annual message to Congress the “State of the Union” address in 1935. The phrase comes from Article II, Sec. 3 of the U.S. Constitution: “He (the President) shall from time to time give to the Congress information of the State of the Union and recommend to their consideration such measures as he shall judge necessary and expedient.”

    http://www.foxnews.com/opinion/2011/01/25/like-justice-alito-thomas-jefferson-skipped-state-union-started-new-tradition/#

    Jefferson thought the State of the Union address to resemble to much a kingly spectacle, so he started writing it and sending copies to all concerned. This was good enough for 112 years until Woodrow Wilson need the center stage to push his international progressive agenda and the great Oratory tradition once again came to life for the benefit of the word smiths who give the tail a leg meaning and spin their magic rhetoric as did Hitler. Deception is better spoken than read I guess. It was the Democratic blowhards who renewed the Oratory Rhetoric gala as pep rallies for cause….Go Figure.

    • I H8 GOPers

      Glans Beck, “Woodrow Wilson, I hate that guy!” Did Raygun, Nixon and the Bushies abstain? Nope, dope.

      • $8194357

        You sure are full of hate. I see anger management in your future….

      • $8194357

        So you hate Jefferson and the other presidents who followed his lead for 112 years as well? Just curious if you are an equal oppurtunity hater, or just hate those right of your ingnorance?Type your comment here.

  • Bat One

    When you think about it (liberals are excused!), Obama is doing exactly the same thing with oil that he is doing with healthcare… raising the cost of both. With healthcare he is increasing the demand by some 32 million while reducing the supply – a time-tested formula for price increases, shortages, and ultimately, rationing by the federal government.

    With oil he merely reduces the supply while the nation’s and the world’s economic recovery spur and increasing demand. And again, the available supply cannot keep up with demand, and the price continues to escalate.

    When Obama took office, the price of crude oil was less than $40 per barrel. Today the price hovers around $90, and as the world’s economy recovers, the demand for oil, and the pric, will only continue to escalate. Which stupidly self-defeating when you think about it… for both the country and Obama personally. ‘Cause ain’t no president gonna get reelected on $4.50 to $5.00 per gallon gas.

    • $8194357

      But how much did Soros and his hedgefund buddies make off the taxpayers subsidies of Petrobaus in Bazil? Invested some 10 billion or so of hedge fund money and had Barry have the US taxpayer pay the investment money to start the operation up with a $20 billion dollar stimulus check at the same time Barry was shutting down American Gulf Coast drilling because of the big deep water spill of the coast of Louisianna. This came to light on the net and Soros bailed…Funny part of this is all the oil from the Brazilian offshore field we finances is earmarked for Chinese support for Soros hedgefund pre postioned assets over in China..All subsidized with venture capital cuortosy of you and me….Take the proffit while someone else “us” pay for it and take the risk…Ruinous mischief of the worst order…

    • I H8 GOPers

      Maybe he should campaign on $1400 gold. The TEA Party would probably be confused, but then I repeat myself.

  • awfulorv

    If Obama can rid the govt. of the need to give money to the Native Americans by requiring the oil cos. to share their profits in No. Dak., he will do so. I’m surprised he hasn’t done it already. No, wait, he’s waiting till the experts get everything running smoothly before he strikes. Think white Zimbabwe farmers.

  • Dutchsays

    I H8 GOPers your arguments bear the tiresome tone of every sociology and anthropoloy college professor in the USA repeating the drivel of the Enlightenment intellectuals like Voltaire and Adam Smith when they resurrected the ancients Stoic’s phrase “citizens of the world” to argue for some federal union of states. To benefit the lower classes and finance the undertaking at the expense of the successful, they came up with the graduated income tax (Abbey de Saint-Pierre in “Projet de paix perpetuelle” ), theories of liberty and equality, social contract, natural rights, and ever since the history of the West has been clashes between those who would preserve or resist the Revolution. Rousseau, the French leader of the Revolution worked to write the Declaration of the Rights of Man which states”The principle of all sovereignty resides essentially in the nation. No body nor individual may exercise any authority which does not proceed directly from the nation” Among the 19th century offshoots of this revolutionary zeal was Marxism, from which has evolved the American democratist
    movement and party. While ostensibly promoting economic justice and a new world order to end exploitation of the poor and poor nations, Marx had hostile and bigoted feelings towrd his own Jewish race, Africans, and Scots, and advocated their elimiation. The foundation of revolutionary internationalism is a hatred of exceptionalism and distinction, that no person or group should be seen as performing better at ANY task than others, and that personal or collective excellence must be punished by the mediocre proletariat, the commoners – hence the almost bloodthirsty envy and violent urgings of our statist Democrats toward thoe who are successful beyond the norm, and their socially acceptable means of “eliminating” them, throug confiscatory taxation. Of course you demand to tax the oil producers out of existence, their ability to amass wealth in such a universally conspicuous manner might lure the proles from your Marxist “Worker’s paradise on earth” to a more comfortable life.

    • $8194357

      Rousseau, the French leader of the Revolution worked to write the Declaration of the Rights of Man which states”The principle of all sovereignty resides essentially in the nation. No body nor individual may exercise any authority which does not proceed directly from the nation” Among the 19th century offshoots of this revolutionary zeal was Marxism, from which has evolved the American democratist
      movement and party. While ostensibly promoting economic justice and a new world order to end exploitation of the poor and poor nations, Marx had hostile and bigoted feelings towrd his own Jewish race, Africans, and Scots, and advocated their elimiation.

      When combined with Fruedian pyscho babble they came up with the political correctness that led to “Nation Building” out of cause and group as well with radicle feminism, sexual liberation, racism, just about any ‘ism’ you want to put out there to radical enviromentalism and global warming. They made new ‘communist citizens’ out of all the radical causes and ideolgies who united behind the Progressive liberal statist…Been going on a while per plan and folks on the conservitive side are just now waking up to it..These groups are dependent not only upon protected status but alot of them are also dependent upon Federal entiltlement programs as well. ACORN is an example of nation building..AFL/CIO is a communist nation built to support the progressive democrats agendas. Public service unions are now nothing more than loyal “nations” to support the central proletburuo in DC…It is defininatley time for Americans to wake up to what has been going on with the sovietizing of America.

  • Dakota

    So then Rob, you are calling for tax hikes on farmers which should send chills down the spines of North Dakota farmers. Ah but you never ever said that. In fact you have said just the opposite.

    Hypocrite!

  • Bat One

    Obviously, Obama and the Democrats believe that if there is money out there, somewhere, the government ought to take it. It’s really pretty simple: demonize those who are successful, and then take their profits.

    How much easier would life be, for everyone, if everybody who earns an income, and every business, large or small, paid a flat rate of 15% of what they earn in federal taxes. Period. No deductions. No exemptions. No credits No redistribution and no exceptions. The entire tax code on a single sheet of paper. Double spaced.

    • borborygmi

      net or gross income

  • Jett

    Agreed Bat…Flat tax on income, not wealth.

    Then eliminate the extraction tax. Invest whatever money is in the teacher’s pension and state workers retirement fund exclusively in oil and the oil industry. Let’s just see what happens. What the hell….Why not?

  • Bat One

    If you factor in the economic growth this sort of tax overhaul/simplification would generate (something both the CBO and the JCT always ignore – static scoring), I have no doubt the federal budget could go from trillion dollar deficit to huge surplus in less than 5 years.

  • awfulorv

    I disagree with your statement that Oil has caused you folks to miss the recession. You, as did our friends to the north, Canada, avoided the disaster because you had few minorities and therefore no reason to install said minorities in homes they didn’t deserve, and couldn’t pay for. Then, once whitey realized you could get something for nothing he, also, wanted in on the goodies. That’s the basis for our dilemma, despite the protestations of the Franks, and the Dodds. Same thinking applies to a “college degree” and, to a lesser extant, a Southern farm, a poor sharecropper one once dreamed of owning. When, oh when, is the guilt of those who built this country, and caused it to profit, as no other, going to be assuaged?

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