Richard Tracy: Taxes are a cost of doing business, built into price point of every product

To The Daily Sun,

With his declaration that blaming gas price hikes on Joe Biden is a “blatant lie,” your reader, Steven Dionne in a letter April 14, demonstrates just how myopic, if not willfully ignorant, some people can be. For goodness’ sake, Biden campaigned against fossils fuels. His executive order canceled the Keystone Pipeline project, costing investors tens of millions of dollars. Another executive order “Tackling the Climate Crisis at Home and Abroad” in part directed the interior secretary to halt new oil leases on federal land and to review existing permits. With these actions and others, the Biden administration injected more uncertainty into the oil futures market. These are facts.

Now let’s talk about the profitability of “demon” oil, the drilling for which had a profit margin of 4.7% in 2021 according to Investopedia. For 2020, the profit margin was a paltry 2.8%. Does that sound like gouging? Contrast that with the federal tax on gas (18.4 cents/gal) and diesel (24.4 cents/gal). Who’s gouging who?

The federal corporate tax rate was reduced during the Trump administration to bring the United States in line with its global competitors. Previously, the U.S. corporate tax rate was one of the highest in the world. American companies of all kinds, not just oil, cannot be expected to compete successfully while carrying that burden, nor can they be expected to remain stateside when far lower tax burdens can be found overseas.

And who is it that pays corporate taxes? Businesses big and small may write the check, but taxes are a cost of doing business which is built into the price point of every product or service. Therefore, all of us, including Mr. Dionne and I, end up paying corporate tax rates imposed by misguided politicians.

Richard Tracy

Laconia