At 39 percent (combined federal and state) the U.S. corporate tax rate, coupled with its system of worldwide taxation, makes American companies less competitive in a global marketplace and harms the U.S. economy and workers. We support pro-growth tax reform that significantly lowers the corporate tax rate and moves the U.S. from a worldwide system of taxation to a competitive territorial system that only taxes the income earned within the U.S..
Misguided proposals targeting the U.S. oil and gas industry, if passed, could undermine long term, capital investments and the range of benefits that they generate, including increased domestic energy production and reduced imports; job creation; growth in economic activity; and increased tax and royalty revenues for federal and state governments. U.S.-based integrated oil companies, such as ExxonMobil, cannot absorb targeted tax increases without undermining their ability to invest in a globally competitive energy market.
Most of the tax rules related to oil and gas exploration and production are not unique. Other industries qualify for exactly the same, or very similar tax treatments, in that they allow deductions for capital investments in the United States. In fact, large integrated oil and gas companies, such as ExxonMobil, are often treated less favorably than others within our own industry.
While we support a comprehensive review of current tax policy in any debate on tax reform, certain targeted tax increases on the oil and gas industry proposed by some policymakers are punitive and would discourage investments in energy development to meet the energy needs of a growing American economy.