Democrats seek to slash subsidies for 'Big Oil'

[Vi-Jay 218]

Democrats seek to slash subsidies for 'Big Oil'

Democrats seek to slash $2B a year in subsidies for 5 largest oil companies

Andrew Taylor, Associated Press, On Tuesday May 10, 2011, 1:43 pm

WASHINGTON (AP) -- Democrats running the Senate are seeking to strip the five biggest oil companies of tax breaks that pad their profits by $2 billion a year and instead use the money to help defray the spiraling budget deficit.

New legislation unveiled Tuesday by Sens. Robert Menendez, D-N.J., Claire McCaskill, D-Mo., and Sherrod Brown, D-Ohio, would cut off immensely profitable companies like Shell Oil and Exxon Mobil from subsidies such as a deduction originally aimed at boosting manufacturing. The bill would also close a loophole that effectively allows oil companies to shield themselves from taxes by deducting royalties paid to foreign governments.

The top five oil companies have booked profits of $36 billion in the first quarter of this year alone. The Democrats say that at those levels the big oil companies wouldn't miss the subsidies.

Republicans and a handful of oil state Democrats like Mary Landrieu of Louisiana are expected to filibuster the bill to death. An earlier version was opposed by seven Democrats on a filibuster vote in February, but Democratic leaders have now narrowed the legislation to permit smaller producers to continue to claim the subsidies.

The issue is back in the wake of comments last month by House Speaker John Boehner, R-Ohio, who said in a television interview that Congress "certainly ought to take a look at" eliminating the subsidies. He quickly backed away from the comments.

Democrats say getting rid of the subsidies is a no-brainer when the government is running deficits that require it to borrow more than 40 cents of every dollar it spends.

"If we can't do this. If we can't remove subsidies from these profitable big oil companies, then I don't know if we can ever get to the really difficult work that lies ahead," McCaskill said. "This ought to be the essence of low-hanging fruit."

Republican opponents say the companies would simply raise prices if the measure became law.

Menendez acknowledged that the legislation -- slated for a vote next week -- won't do anything about gas prices exceeding $4 a gallon in many places.

The measure would also eliminate the so-called oil depletion allowance for the five oil companies. That allowance permits producers a tax deduction comparable to the break given manufacturers for depreciation of the value of an investment in plants and equipment.

The other companies that would be affected by the legislation are BP, Chevron, and ConocoPhillips.

"It's a shame that this industry hasn't been appreciated for all of the good that it does," Landrieu said.

__________________________________________________________________________________________________________________

Would somebody please find that man and give him a real hard kick in the nuts?

and, Does anybody agree that Oil companies would "simply raise prices"?

Edited May 10, 2011 by Vi-Jay

[I AM NOT THAT GUY 5,715]

2 Billion a year? Nancy spent more than that flying back and forth from San Francisco when she was Speaker of the House.

[Vi-Jay 218]

2 Billion a year? Nancy spent more than that flying back and forth from San Francisco when she was Speaker of the House.

I'm interested too read what the VJ "think tank" has to say 'bout prices go up if the cuts are made.

[Mr. Big Dog 10,747]

Let's see. Big oil raked in a cool trillion dollars in profits over the last decade. That's about $100 billion a year. So, we're talking 2% of the profits that big oil makes. Is that going to have a significant impact on gas prices at the pump? The math says no.

[Vi-Jay 218]

Let's see. Big oil raked in a cool trillion dollars in profits over the last decade. That's about $100 billion a year. So, we're talking 2% of the profits that big oil makes. Is that going to have a significant impact on gas prices at the pump? The math says no.

I'm leaning that way too.

but, I also wonder if the hype will drive prices up.

[Mr. Big Dog 10,747]

I'm leaning that way too.

but, I also wonder if the hype will drive prices up.

Corporations will never let an opportunity to fleece consumer go by unused. That doesn't mean that we should continue to subsidize them in the hopes that we'll be subjected to perhaps one fleecing less. When these subsidies were put into place, oil was fetching a small fraction of what it fetches today. The issue then was that oil production may not be feasible in the US anymore putting thousands of jobs on the line. At that time, it certainly was in the national interest to find ways to keep the companies producing here and to keep people employed. At $100.00 a barrel, I think the companies can manage w/o that assistance. The profits they book would clearly suggest that they can.

[Obama 2012 1,714]

They aren't subsidies.....

Amtrak gets subsidies...

Big Oil has tax incentives/breaks.

[Zero Sum 305]

Corporations will never let an opportunity to fleece consumer go by unused. That doesn't mean that we should continue to subsidize them in the hopes that we'll be subjected to perhaps one fleecing less. When these subsidies were put into place, oil was fetching a small fraction of what it fetches today. The issue then was that oil production may not be feasible in the US anymore putting thousands of jobs on the line. At that time, it certainly was in the national interest to find ways to keep the companies producing here and to keep people employed. At $100.00 a barrel, I think the companies can manage w/o that assistance. The profits they book would clearly suggest that they can.

There it is. They seem to be just fine.

[I AM NOT THAT GUY 5,715]

The easiest way to end corporate welfare is to eliminate corporate taxes. Then tax all the deferred compensation, stock options, and benefit packages as regular income. Then we can get rid of all the true subsidies, price controls, and buy downs, that hamper innovation and competition.

As a benefit, we can start bringing businesses back to US soil.

Edited May 10, 2011 by Some Old Guy

[Ban Hammer 13,345]

brilliant ideas like this can only happen when dems put their heads together

[Vi-Jay 218]

Corporations will never let an opportunity to fleece consumer go by unused.

History speaks for itself.