'Honest analysts know these facts. But politicians ignore them in favor of sowing suspicion of the industry. The latest "solution" they offer is to reduce supposed tax-code "subsidies" to Big Oil.
In fact, the energy industry is hardly undertaxed: It pays an effective tax rate of 41.1 percent, compared with 26.5 percent for the rest of the S&P Industrials.
More important, this is no subsidy. When a business -- any business -- incurs expenses, it deducts those expenses against its revenues at tax time. In the case of the oil and gas industries, those expenses are overwhelmingly the costs of exploration and production. Some "subsidy."
So the real-world effect of a politically motivated tax penalty on energy companies will be reduced exploration and extraction. Of course, that would be just fine for the green ideologues. For them, the less drilling the better, and the more subsidies for green energy, the better.'