A frequent refrain during budget and debt ceiling debates is that we need revenue enhancement: higher tax rates, reduced deductions, eliminated credits. But doing this, especially amid today’s massively expanding regulations, will kill more jobs and further reduce government revenues.
There is a better way. Huge revenue sources are literally under our noses, or more precisely our feet.
America is blessed with vast oil, gas, coal, uranium, rare earth and other natural resource riches – to compliment our ultimate resource: the creative, competitive, innovative spirit of our people.
Finding and developing these resources would generate millions of jobs and billions, even trillions, in new government revenue and societal wealth. It would prevent default and downgraded credit ratings, reduce the need to cut government programs, shrink unemployment and welfare payments, avoid having to send hundreds of billions of dollars overseas each year for foreign energy and minerals, and reduce the need to borrow $120 billion out of every $300 billion the United States is now spending every month.
Many of these untapped resources are on federal public lands in our western states, Alaska and Outer Continental Shelf (OCS). Many more are on private land and onshore and offshore state-owned lands.
Leasing, exploration, extraction, transportation and processing unleash economic activities and revenues on extraordinary scales: lease bonus and rental payments, permit fees, royalties and severance taxes for each unit produced, direct and secondary jobs, taxes on corporate profits and workers’ income, property taxes on equipment and facilities.
These activities also generate billions of dollars in purchases of equipment, food, supplies, raw materials, hotel lodging, special services and myriad other items. All this means still more employment, newly enabled consumer spending, more local, county, state and federal revenue, and other economic benefits.
Newly developed horizontal drilling and hydraulic fracturing (“fracking”) techniques have enabled companies to unlock previously unavailable natural gas riches in conventional and shale gas deposits. That increased production, in turn, has reduced industry’s cost for energy and raw material feed stocks.
The American Chemical Council says this is reopening idled plants and creating jobs. In 2010 it helped increase chemical and plastics exports by 17% and 10% respectively, turning a $100 million industry balance of trade deficit into a $3.7 billion surplus. Other industries could soon see similar benefits.
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