Tax consequences of the selected House and Senate energy tax provisions. [Burden of tax on Texans]

Technical Report · Wed Nov 23 04:00:00 EST 1977

OSTI ID:5346704

The House's Crude Oil and Natural Gas Liquids Equalization Taxes are designed to bring the costs of purchasing these refinery inputs into parity with the costs of purchasing equivalent imported refinery inputs, thus obviating the need for the present entitlements program which would remain in effect under the Senate Energy Program. The Entitlements Program's system of payments between refineries is designed to reduce the prices paid by refiners which import higher priced foreign oil. Because Texas refineries are less dependent on foreign oil (25 percent of crude oil input) than are other U.S. refineries (35.7 percent of crude oil input), Texas will bear a disproportionate share of the burden under either program. The important distinction to be made between the two programs is that the burden will be much greater under the taxing system. This occurs because the taxes are designed to raise the refiner acquisition costs of refinery inputs that Texas refiners heavily utilize, namely domestic oil and natural gas liquids. Texas refineries purchase 29.7 percent of all the domestic crude oil and 44.0 percent of all the natural gas liquids that are purchased by refineries in this country. Consequently, Texas refineries will account for 30.8 percent of the US consumption of taxable refinery inputs. The net effect of the House's tax provisions is to increase per capita taxes for Texans by $199.19 while increasing per capita taxes for all other Americans by $106.38. The Senate's version would reduce per capita taxes for non-Texans by $73.14 while reducing per capita taxes for non Texans by $104.26. Both programs are inequitable for Texans; if the provisions from both programs were adopted, then Texans would bear an added per capita tax burden of $126.05, while the rest of the country's tax burden would be only $2.12. In other words, Texans would be responsible for 60 times the tax payments as would other Americans.

• Research Organization: Texas Governor's Energy Advisory Council, Austin (USA)
• OSTI ID: 5346704
• Report Number(s): NP-4900771; ON: DE84900771
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
294002* -- Energy Planning & Policy-- Petroleum
ECONOMIC IMPACT
ENERGY SOURCES
FEDERAL REGION VI
FOSSIL FUELS
FUELS
IMPORTS
INDUSTRIAL PLANTS
LAWS
NATIONAL GOVERNMENT
NORTH AMERICA
PETROLEUM
PETROLEUM REFINERIES
STATE GOVERNMENT
TAX LAWS
TEXAS
USA