Sooner Survey: Don’t Increase Oil And Gas Tax

Pat McFerron
President, Cole Hargrave Snodgrass & Associates

When Oklahomans are asked about our current taxing of oil and natural gas recovered from the horizontal drilling practices, only the most liberal elements of the electorate favor an increase, while the vast majority (69%) support it staying the same (48%) or having it further reduced (21%). While there is little doubt creative polling could create a question to get a different result, if messaging is removed and the simple facts are evaluated, it is clear this is an issue with an ideological edge and potentially an important electoral issue, especially for Republican primary voters.

Any Republican should have grave concerns about being perceived as being for a tax increase. Without any messaging, 83% of Tea Party supporters (who represent 37% of all voters and 57% of Republicans) oppose an increase as do 78% of those who have voted in three or more Republican primaries. Even among those on the left of the ideological spectrum there is not even plurality support for an increase (39% increase tax; 42% Keep as is; 13% cut tax among those who disagree with the Tea Party).

Once voters are told that the 1% tax is set to expire and that allowing that to happen would result in a 7% tax on the first day of production, we again see a strong sentiment for the tax to remain at today’s rate (64% keep at 1%; 28% increase). Among registered Republicans 71% support keeping the tax at 1% and only 19% support an increase. While the breadth of support for keeping the tax at 1% is seen in the overall number among registered Democrats (58% Keep at 1%; 35% Increase), the importance of this issue in a general election scenario rests in intensity among the most important swing group in Oklahoma politics, anti-Obama Democrats (70% Keep at 1%; 25% increase).

Very simple messages resonate with Oklahoma voters on this topic. After being told that other states such as North Dakota or Texas could lure away drilling jobs, 74% want to keep the tax on the first four years at 1%; being told that higher taxes means fewer jobs encourages 73% to want to keep the tax at 1% and 72% say to keep it at 1% after hearing the sentiment that it is better to have jobs and lower taxes than higher taxes and fewer jobs.

We did not not just test messages of those advocating the 1% tax rate. We also tested those of opponents. Voters remain committed to the conservative principle of lower taxation even after hearing opposition messages such as: the current structure is unfair to those using conventional drilling methods (64% keep at 1%); and, this is a tax break for big oil that pays higher taxes in other states and still makes a profit (60% keep at 1%).

One of the most significant findings of this study is that voters do not buy into the idea of taxing oil and gas production at a higher rate and then using that revenue to lower the state income tax. When told that is an option that has been discussed, 65% support leaving the tax at 1% and only a quarter (25%) support an increase. Those comprising this 65% tend to be the more conservative elements of the electorate.

After the discussion, we see even greater support for keeping the current tax structure (70% Keep at 1%; 25% Increase). At this point, 77% of rural residents, 78% of registered Republicans, 77% of senior citizens, 87% of Tea Party Supporters and 83% of Republican primary voters support keeping the rate at 1% for the first four years of production.


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