Here’s a perfect example why marginal tax rates should be mostly ignored and only effective tax rates matter. Harold Hamm, the CEO of Continental Resources and Romney’s chief energy adviser, testified in front of a Congressional committee to complain about his company’s astronomical tax rate:
These same tax provisions not only allowed us to survive the disastrous years of OPEC dominance and decades of sub-economic oil and gas prices here in America, but most importantly, they allowed us to try new things and fail, and try again and fail, until we finally succeeded in “breaking the code” to produce the vast resource plays (even the source rocks themselves) like the Bakken in Montana and North Dakota. Continental’s effective tax rate is 38%!
But according to Citizens for Tax Justice, Continental paid an average 2.2 percent tax rate, or $40 million, over five years.
In fact, the highest federal tax rate paid by Continental in the last five years, during which they’ve made almost $2 billion in profits, was 3.2%. The lowest was .1%. And he thinks that’s too high.