Ryan calls for ending oil subsidies

Politico ^ | 04/28/2011 | Robin Bravender

[Hawk720]

House Budget Committee Chairman Paul Ryan called for ending oil subsidies Thursday, further complicating Republican efforts to stay on message about rising gas prices.

The Wisconsin Republican told constituents at a Waterford, Wis., town hall meeting that he agreed that federal oil subsidies ought to end.

“We’re talking about reforming the safety net, the welfare system; we also want to get rid of corporate welfare. And corporate welfare goes to agribusiness companies, energy companies, financial services companies, so we propose to repeal all that,” Ryan said in response to a question about oil subsidies.

A video of Ryan's town hall meeting was circulated by Think Progress, a blog run by the liberal-leaning Center for American Progress Action Fund.

In a statement to POLITICO, Ryan’s office said the House-passed budget resolution “clearly states that as part of an overall corporate tax reform, tax loopholes and deductions for all corporations should be scaled back or eliminated entirely. That obviously includes oil companies. Elsewhere, we state that subsidies for all energy companies need to be reduced or eliminated so that we can get government out of the business of picking winners and losers in the market.”

[AAABEST]

End all subsidies.

I agree, but the oil "subsidies" aren't. They're tax breaks given in return for the oil companies taking huge risks in exploration and development.

What's funny is that if we end these "subsidies," Fed.gov wouldn't even get the money. The oil companies would likely stop engaging in the activities that are being "subsidized."

As a bonus course oil would also be more scarce, compounding our energy problems.

[cripplecreek]

I only hope that the GOP is smart enough to get something (from the president) in return for giving up the oil subsidies...like opening up more federal lands and offshore territory to drilling.

That's what I'm thinking. Cut the "subsidies" to oil companies but only if we cut them to other energy producers and tie it to opening more land to oil and gas production.

We're gonna need to take the senate in the next election to really right the ship.

[MSF BU]

I am not especialy fond/unfond of Ryan, but the Heritage Foundation has made similar proposals: http://blog.heritage.org/?p=50173

[antiRepublicrat]

Good first step, as long as we also hit corn/ethanol, farm, sugar, “green,” etc.

[GeronL]

I am against all forms of subsidies and favoritism.

[catfish1957]

Corporate federal tax paid by ExxonMobil- 10 billion

Corporate Tax paid by GE- 0

End result will be that Oil companies will find it less desireable to drill anywhere in this country. More hope and change from the dumbass punk president.

[MSF BU]

Good point, but probably too complicated for most folks to take the time to understand. I'm glad that I invested as heavily as I did in pipeline MLP’s and Canadian Oil Trusts. They are going to be major beneficiaries of the coming energy debacles.

[paulycy]

I agree, but the oil "subsidies" aren't.

I did not know all that. Thank you for the info.

[BwanaNdege]

Sure, end oil subsidies!

Then end holdups on drilling by the EPA, the Endangered Species Act, etc. Turn approval for all permits for new refineries over to the state where the refinery will be located.

Tax the Sierra Club, World Wildlife Fund, etc. as a “for profit” political organizations, same rates as the oil companies.

Level the playing fields!

[muawiyah]

You forget something ~ there's no one for one comparison. MOST of the oil pumped in the United States comes from offshore wells where the US Government owns the wells, the land, the rights ~ etc. The companies get to pump oil and sell it AFTER they pay rent and royalties.

There is no oil depletion allowance for the government of course.

If the "subsidy" is down to a tidy $4 billion out of an umpty umpt percentage of a trillion bucks ain't much left of it eh.

Large blocks of onshore oil is also pumped from lands owned by nonprofit entities, Indian tribes, Eskimo corporations and other federal lands.

Oil companies who own their own onshore oil fields don't pay rent or royalties (as I understand the way this is dealt with).

It'd be nice to know who the folks are who own their own wells. Is it possible they are all Democrats?

If so, I like that ~ a tax (inferentially) that applies to Democrats.

The "subsidy" currently being considered is little more than an accounting gimick. The companies currently get to write off their investments in drilling equipment as expenses over a 4 year period. If you simply end that "write off" they'll buy far less drilling equipment and you'll get more accidents and blow outs as old funky stuff is worked beyond it's expected lifetime. If you extend the "write off" to 5 years it'll reduce the value of future investment ~

There's much less here than meets the eye folks.

[JDW11235]

Agree 100%. “Conservative” seem to be conservative only until the socialism of their choice, which is exactly why we are where we are, today.

However, that having been said, there need to be a lot more reforms to go hand in hand with the ending of all of these unconstitutional subsidies, as well.

[mylife]

No fooling.
I am tired of paying more to get less MPH while driving to the store to pay higher food costs.

[EGPWS]

Cut all subsidies across the board along with regulation!

In the scheme of things this is what is desired for a free society anyway.

Subsidies only make the receiver beholden anyway!

[Minus_The_Bear]

Yeah, but do you see corn & wind scams getting cut? No.

[JDW11235]

“I only hope that the GOP is smart enough to get something (from the president) in return for giving up the oil subsidies...like opening up more federal lands and offshore territory to drilling.”

Excellent idea, and spot on. We must end the socialism, including the government theft of state lands. Then they can be open for drilling. It’s not going to happen overnight, but it all MUST happen. That, or we’ll simply be invaded by those who WILL use the resources instead (Well, they’ll make an attempt to invade, at least).

[mylife]

Works for me.

[Mike Darancette]

And corporate welfare goes to agribusiness companies, energy companies, financial services companies, so we propose to repeal all that,” Ryan said in response to a question about oil subsidies.

Good on Ryan, cut all corporate welfare including the green stuff. Of Course Obama and the other RATs will never go for cutting green subsidies.

[muawiyah]

They aren't really "tax breaks" either. They are different periods of depreciation for capital investment. You end up paying whatever taxes are due at one time or the other depending on how Congress sets the periods of depreciation.

A "write off" for hiring employees is no different than a "write off" for buying a chunk of pipe. You just get to "write off" the employee salary this year rather than next year.

Functionally the creation of a capital depreciation period greater than one year is the same as INCREASING TAX PAYMENTS in the Current Year and reducing tax payments in a Future Year.

It's SMOKE and MIRRORS.

[re_nortex]

MYTH: The oil and natural gas industry receives unfair subsidies.

FACT: The industry does not receive subsidies, but is eligible for tax provisions--similar to those available to other industries--that promote domestic job creation and encourage new exploration. The industry also pays an effective tax rate of 48.4 percent, compared to 28.1 percent for all other S&P Industrials.

Those are the facts. While some see the industry's doing well as a reason to impose additional taxes, punishing success is not in America's best interest.

The Economics of Oil Company Earnings

[seowulf]

The oil companies would likely stop engaging in the activities that are being "subsidized."

Not at all. Oil companies are in business to make money and they make money by selling oil. They have oil because they look for it and then pump it out of the ground.

What they will do is increase the cost to the consumer to cover the cost of production.

The individual customer will decide if the cost is worth it.

In other words it will be more of a free market with less government manipulation.