So, if we are drilling so much oil and fracking so much gas,

[JDPriestly]

why are we facing a budget crisis?

Don't the oil and gas companies pay taxes on what the drill and frack?

Seems like if we are now oil and gas self-sufficient and don't have to import, we should be raising lots of tax revenue from the profits of those drilling and fracking.

Does anybody know why we still have a budget crisis if this is true?

[madville]

1. They lease areas

And the consumer pays the taxes on the end product is pretty much how it works now. Sure they could be taxed somehow on production but the consumer would just pay more so the company could maintain their profit margin.

[JDPriestly]

3. Shouldn't we tax the revenue from the leases, or, if the leases are on

government land, raise the cost of the leases?

[Left Turn Only]

2. Simple Economics

There are three main reasons why the increase in production of oil and gas is not improving the budget deficit. First, oil companies receive huge tax breaks. Second, the amount of oil and gas being sold in the U.S. is decreasing over time, and most tax revenue on these products is made when Americans buy the stuff. Third, what the people don't seem to realize is that most of the tax revenue in this country comes from the middle class. When President Bush made those tax cuts, it cut deeply into the total revenue this country makes. While President Obama and Congress repealed the tax cuts on the wealthy, it kept all the tax cuts on the rest of the 98% or so in place. Unfortunately, it was obvious the country couldn't afford the cuts in the first place, but, for political reasons, most of them remain in place, and Bush and the Republicans now have their main weapon for destroying the social programs they have hated ever since they were put in place by FDR and LBJ by saying we just can't afford them. The American people are behaving like children: they demand low taxes while insisting the government keeps in place programs that they like.

[KoKo]

4. An interesting reply...and one that makes me think further about

what's going on here. Thanks! Not that I agree or disagree...it's just that it makes me think further...and that's a good thing.