Keeping America Hooked on Foreign Oil
My latest column for The Week discusses the harmful effects of Obama's new oil exploration taxes.
The budget proposes to slam oil companies with new taxes on their exploration activity. (More accurately: it will slow the rate at which companies can deduct their most important exploration costs.)
The Obama administration promises that the tax will not increase the price of oil to consumers. That seems probably right. US companies might be tempted to pass the tax onto their customers – but they compete against non-US companies that do not pay the tax, and that will undercut the US companies if they hike their prices.
Instead, US companies will likely cut back their exploration activities, leaving more of the world’s oil opportunities to non-US companies.
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