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Lets Get an Easy 40 Billion ++ in Tax Revenue!

January 9, 2013

We heard a claim that opening up oil exploration and drilling would produce enough oil to make us independent of foreign oil and produce enough tax revenue (at 15%) to balance the Federal budget.

That’s an invitation to start looking at data and doing a little grade school level arithmetic.

First we get annual oil imports from the Federal government at http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbbl_a.htm.  It seems that we imported 4,198,806  thousand barrels (a little over 4 Billion barrels) in 2011.

Here’s the arithmetic:  4,198,806,000 x (15% of $60/bbl = $9.00 tax/bbl) = $37.8 Billion/yr

Now lets add a few direct beneficial effects that will result:

  • Increased employment will reduce unemployment payments.
  • We will get more revenue from payroll taxes from increased employment.
  • We will get more revenue from corporate profits tax.
  • We will get more revenue from  increased national prosperity caused by lower energy costs.
  • We would quit feeding billions to countries that abuse women and minorities and it would improve our balance of payments by about $400 billion.

In today’s government reality, $38 Billion isn’t all that much, but it is useful at about 4% of a trillion. You can probably multiply that by 2-5 or so to account for other tax revenue that will result from the increased economic prosperity.

The big advantage is that NO ONE gets hurt, in fact most Americans will benefit from lower energy costs (You did notice that I use $60/bbl instead of the current $90+/-, didn’t you?)

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