I posted yesterday about Alaska looking to North Dakota for leadership on the oil tax issue. In Alaska they raised their oil tax and are now seeing a drop off in production. While here in North Dakota we’re seeing production that’s rocketing upward, lowering and simplifying the extraction tax now would ensure that we see continued growth in the future.
There are a lot of things that could change in the market. The federal government could enact new regulations. The bottom could fall out of the oil market and prices plunge. Some new oil play in a state with a friendlier tax environment could open up. If we want the oil producers here for the long term, rather than just for a boom-and-bust, then we need to take action now to facilitate their staying.
But unfortunately, our state’s leaders have set aside this debate for now buying into short-sighted excuses about needing to get all the tax revenues from oil now that we can. Or that our state won’t have enough revenue if we cut the oil tax. Or that the oil producers don’t need tax relief because oil production in the state right now is just fine. These are all superficial arguments based on big government greed and knee-jerk dislike of the oil industry in general.
We need to tell them that the oil extraction tax needs to be fixed. With its trigger rates based on oil prices it’s far too complicated. Give North Dakota oil producers a flat, reliable tax rate and we can ensure a much longer oil play in the state.
The form below will send an email to every legislator in Bismarck. Use it to tell them to reconsider legislation to fix the oil extraction tax.[customcontact form=18]