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A response to Ohio Senator Sherrod Brown on oil "subsidies"

Posted on 04/28/2012 2:55:39 PM PDT by reaganator

Senator Sherrod Brown's recent comments on reducing the federal budget deficit; > > "Cut $20 billion in spending by ending taxpayer-funded subsidies to the five biggest oil companies."

$20 billion is a ridiculous amount to cite. The figure the other Democrat Socialist Statists use when demagoging this fabricated issue is around $4.3 billion in so-called government "subsidies". > > Senator Brown and President Obama talk about huge "subsidies" as if taxpayers are signing billion dollar checks to oil and gas companies. But oil companies do not get subsidies. Rather, like every other business, they are allowed to take tax deductions for the expenses they incur. A tax deduction and a government subsidy are not the same. > > The domestic manufacturing tax deduction that oil and gas companies receive is a general tax deduction that goes to all domestic manufacturing. Producers of clothing, roads, electricity, water and many other goods produced in the United States are all eligible for the manufacturers nine percent tax deduction. Congress already imposed a tax hike for oil and natural gas companies by freezing the deduction at six percent for just that industry. > > The only tax in which the oil companies seems to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy would be $0.78 billion per year-enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreigned-owned and state-owned oil company for drilling offshore in Brazil. > > Oil companies already pay tax rates of 40-50 percent of income. For one company, Exxon, in one quarter of one year, that amount was over $8 billion, or almost double the so-called "subsidy" for all oil companies for an entire year. > > Profit is the amount of money a company has made. Profit margin is the amount of money your company or business has earned as a percentage of total revenue. The profit margin for the gas and oil industry is around 6.2 percent. > > When politicians use the words "subsidies" and "tax deductions" interchangeably it is a deliberate attempt to mislead Americans. A purposeful, calculated lie. > > Senator Brown and President Obama are Leftist anti-capitalists who openly advocate government "solutions" and government control. They attack the oil industry and its product because oil is the lifeblood of the American capitalist free market economy. Oil is the fuel of Freedom.


TOPICS: Business/Economy; Government; News/Current Events; Politics/Elections
KEYWORDS: vanity

1 posted on 04/28/2012 2:55:46 PM PDT by reaganator
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To: reaganator

I’m sorry about the “no break” in the text.

I hope the read is worth the eye strain and would like your response.

This is my letter to the editor to my local Ohio newspaper, the Sidney Daily News responding to Sherrod Brown’s oil subsidies statements.


2 posted on 04/28/2012 2:59:05 PM PDT by reaganator
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To: reaganator

Good response. Brown’s assertion that his proposed ‘cuts’ would save $85B on a $7T tab also made me whince.


3 posted on 04/28/2012 2:59:54 PM PDT by griswold3 (Big Government does not tolerate rivals.)
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To: griswold3

Again, I copied and pasted from my e-mail. I know it bothers many to have it all running together like this, so my apologizes.

Please feel free to tweak this response for use in newspapers that Sherrod Brown’s lies have appeared in. I encourage this.

This election cycle, all is at risk, everything.


4 posted on 04/28/2012 3:03:33 PM PDT by reaganator
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To: reaganator
Whenever taxes push the price of oil from domestic producer wells above the price of imported oil they shut down the wells ~ easily done with a switch on the pump.

Obviously the government loses any royalties if those wells are on government owned land.

Given the very high price of pumping US oil taking away normal tax deductions for costs incurred in producing that oil will result in a rather large scale shutdown of American wells.

Senator Brown probably ought to retire ~ it's clear he's no longer able to think through this topic.

5 posted on 04/28/2012 3:05:47 PM PDT by muawiyah
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To: muawiyah

The goal is to create the necessity of nationalizing the oil industry.

If the oil industry can longer produce oil profitably, they won’t. The nationalizing of the oil industries “for the good of the people” will ensue.


6 posted on 04/28/2012 3:10:01 PM PDT by reaganator
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To: reaganator

Brown is beatable, but his opponent Josh Mandel’s ads have him wearing his military uniform and touting his service in Iraq. Which is commendable. But, come on! Hammer issues. He is state Treasurer, but looks very young (he’s 34).


7 posted on 04/28/2012 3:20:39 PM PDT by shalom aleichem
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To: shalom aleichem

There is so much to go after Brown and Obama on. Every time the speak they are lying about something.


8 posted on 04/28/2012 3:21:58 PM PDT by reaganator
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To: muawiyah

“Obviously the government loses any royalties if those wells are on government owned land.

Given the very high price of pumping US oil taking away normal tax deductions for costs incurred in producing that oil will result in a rather large scale shutdown of American wells.”

I know that I would have to go on welfare because all of my income except SS comes from wells that would have to be shut in and I am to damn old to go back to work.

Also state governments receive revenue even if the well is not on government land. In Oklahoma we pay a gross production tax of 7.2 % off the top. That is even if the well is operated at a loss, we still have to pay 7.2 % of the gross revenue. I don’t know many other businesses that have such a tax burden.


9 posted on 04/28/2012 3:23:19 PM PDT by Okieshooter
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To: reaganator
"Cut $20 billion in spending by ending taxpayer-funded subsidies"

Wow! That says it all. A tax allowance = federal spending...???!!!

Allowing a company to keep a portion of the money they made by creating and selling an essential product that drives the entire American economy is equated to spending by the ChiComs in our federal gubermint?

10 posted on 04/28/2012 3:25:34 PM PDT by uncommonsense (Conservatives believe what they see; Liberals see what they believe.)
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To: reaganator

Deficit of 1.6 TRILLION and this clown is worried about a few billion in tax deductions for oil companies.

Not only is that a pittance, but it will just be passed on to consumers.

Consumers= That’s us folks, we will pay it at the pump.


11 posted on 04/28/2012 3:26:50 PM PDT by Venturer
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To: Venturer

This is a US Senator who is misrepresenting oil company tax deductions as oil company “subsidies”.

Sherrod Brown is THE issue here more than the fabricated issue he is lying about.


12 posted on 04/28/2012 3:29:30 PM PDT by reaganator
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To: Okieshooter
"I don’t know many other businesses that have such a tax burden"

With capital gains, you pay taxes every time you win and get to write off $3,000 of losses if you have other income (like from interest).

So over 3 years if you make $250K and lose $4 million, you pay about $75K in taxes on a $3.5 million loss.

13 posted on 04/28/2012 3:31:52 PM PDT by uncommonsense (Conservatives believe what they see; Liberals see what they believe.)
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To: reaganator

If the tea party groups in Ohio can replace weasel commie Brown with a CONSERVATIVE, I’d say we accomplished something POSITIVE for our State AND our Country.


14 posted on 04/28/2012 3:33:35 PM PDT by bimboeruption (Clinging to my Bible and my HK.)
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“A tax deduction and a government subsidy are not the same.”

Well, there is the author’s first mistake... ANY process that reduces current or planned future tax revenues is touted as a subsidy by the progressives. Another example of them being still in control of the language of the debate.

Call them out on every instance of their BS. That’s the fastest way to shut down their arguments.


15 posted on 04/28/2012 3:34:19 PM PDT by PubliusMM (RKBA; a matter of fact, not opinion. 01-20-2013: Change we can look forward to.)
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To: reaganator

Brown is nothing but a cheap, freeloading, two bit commie punk. What has that lowlife bastard ever done for America? Now, what have the oil companies done for America. FUBrown.


16 posted on 04/28/2012 3:39:54 PM PDT by FlingWingFlyer (Dumb, dependent and Democrat is no way to go through life. - Rep. Louie Gohmert (R-Texas)
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To: reaganator
Senator Sherrod Brown's recent comments on reducing the federal budget deficit;

"Cut $20 billion in spending by ending taxpayer-funded subsidies to the five biggest oil companies."

$20 billion is a ridiculous amount to cite. The figure the other Democrat Socialist Statists use when demagoging this fabricated issue is around $4.3 billion in so-called government "subsidies".

Senator Brown and President Obama talk about huge "subsidies" as if taxpayers are signing billion dollar checks to oil and gas companies. But oil companies do not get subsidies. Rather, like every other business, they are allowed to take tax deductions for the expenses they incur. A tax deduction and a government subsidy are not the same.

The domestic manufacturing tax deduction that oil and gas companies receive is a general tax deduction that goes to all domestic manufacturing. Producers of clothing, roads, electricity, water and many other goods produced in the United States are all eligible for the manufacturer’s nine percent tax deduction. Congress already imposed a tax hike for oil and natural gas companies by freezing the deduction at six percent for just that industry.

The only tax in which the oil companies seem to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy would be $0.78 billion per year-enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign and state-owned oil company for drilling offshore in Brazil.

Oil companies already pay tax rates of 40-50 percent of income. For one company, Exxon, in one quarter of one year, those amounts was over $8 billion, or almost double the so-called "subsidy" for all oil companies for an entire year.

Profit is the amount of money a company has made. Profit margin is the amount of money your company or business has earned as a percentage of total revenue. The profit margin for the gas and oil industry is around 6.2 percent.

When politicians use the words "subsidies" and "tax deductions" interchangeably it is a deliberate attempt to mislead Americans. A purposeful, calculated lie.

Senator Brown and President Obama are Leftist anti-capitalists who openly advocate government "solutions" and government control. They attack the oil industry and its product because oil is the lifeblood of the American capitalist free market economy. Oil is the fuel of Freedom.

17 posted on 04/28/2012 3:40:19 PM PDT by davius (You can roll manure in powdered sugar but that don't make it a jelly doughnut.)
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To: reaganator

We need oil.

We don’t need the tax breaks for another remake of the Texas Chain Saw Massacre.

End the breaks to Hollywood if you feel they rob local communities of funds for the needy.


18 posted on 04/28/2012 3:40:27 PM PDT by NoLibZone (I'm with Sarah Palin and Dick Cheney - Anybody but Obama, because I trust their judgment.)
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To: reaganator

Good post. Oil companies don’t get money from the government, they pay the government taxes and royalties.

Raise their taxes if you want to but ask yourself how is that going to lower the cost of gasoline at the pump?

And, considering the fact that oil companies can and do drill all over the world, how does raising their taxes encourage them to drill here and put your brother in law back to work?

Again, good post.


19 posted on 04/28/2012 3:43:21 PM PDT by marron
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To: davius

thank you!


20 posted on 04/28/2012 3:47:52 PM PDT by reaganator
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To: marron

There is no federal revenue problem.

There is a federal spending problem.

How would causing the spenders to have more money to spend solve the spending problem?

No one can actually believe this way, it must be purposeful and deliberate destruction.


21 posted on 04/28/2012 3:52:31 PM PDT by reaganator
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To: PubliusMM

ANY process that reduces current or planned future tax revenues is touted as a subsidy by the progressives. Another example of them being still in control of the language of the debate.
************************
I’ve even heard a couple of Dem Reps and Sens, as well as Dem Strategists on cable news, flatly state that the Federal Gov’t. is subsidizing home owners by permitting them to deduct mortgage interest. Some feel that eliminating that deduction would add tremendously to the Federal revenue.


22 posted on 04/28/2012 3:53:38 PM PDT by octex
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To: uncommonsense

Yes I am aware of that as I was subject to it once when I lost $150,000 in a motorcycle shop that I once owned was only going to be able to write off $21,000 (3,000 over 7 yrs). That in my opinion is entirely unfair.

Fortunatly I was starting a new business and was able by keeping the other corporation active, and was able to transfer the losses to the new corp as management fees over a few years. But most people are not in that kind of position.


23 posted on 04/28/2012 4:13:57 PM PDT by Okieshooter
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To: reaganator
The Gov't wants to end all deductions in the name of gaining revenue for itself. So lots less money in everyone's pocket. And our economy will hit rock bottom. Then the citizenry will go crying to the Gov't 'take care of me too, please'. ENOUGH!! Leave us alone to prosper or not! Now!
24 posted on 04/28/2012 4:32:11 PM PDT by originalbuckeye
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To: Okieshooter

Here are the real numbers......

Big Oil and Tax Breaks
By Randall Hoven
To hear the president and Democrats talk, you’d think that Big Oil was sucking the Treasury dry with huge subsidies. Almost a year ago I wrote about the federal government’s “subsidies” to Big Oil. I said then, “They are all tax ‘breaks’... about $4.3 billion per year — about 0.2% of this year’s deficit and enough to fund about 10 hours of current US government spending.”
I was wrong. The tax breaks for all fossil fuels was not $4.3B in 2011. It was only $2.5B — about 0.19% of that year’s deficit, and enough to fund only six hours of U.S. government spending. The source for such heresy? The Congressional Budget Office.
Just to be clear, that $2.5B was not just for Big Oil, but also for Big Coal and Big Gas: all fossil fuels. Here, more exactly, are those subsidies, in the CBO’s words.
• “Expensing of exploration and development costs for oil and natural gas.” ($0.8B)
• “Option to expense 50% of qualified property used to refine liquid fuels.” ($0.8B)
• “Option to expense investment costs on the basis of gross income rather than on production.” ($0.9B)


25 posted on 04/28/2012 6:48:40 PM PDT by Recon Dad (Gas & Petroleum Junkie)
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To: reaganator

He has been a Senator from Ohio for at least two terms. He used to be on that socialist list that West is publishing, but some way or other Brown had his name removed. His ads are really trashing Josh Mandel. one of them asserts that a PAL of mandel is involved in a scandel. Of course Brown had no problem Voting for Obama who has a pal that was a murderer. They have accused Mandel of being accused od some scandel too.


26 posted on 04/28/2012 7:04:53 PM PDT by RightLady (Throw the Traitors out)
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