Skip to comments.Big Oil and Tax Breaks (Are Big Oil companies sucking money out of the Federal Treasury?)
Posted on 03/08/2012 6:44:09 AM PST by SeekAndFind
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) I can't say I understand those "subsidies." Is exploration not supposed to be a cost of doing business for an oil company? Who is to say these expenses are not legitimate costs? But let's take the CBO's word for it that these are, for some reason, "subsidies."
Let's compare those subsidies to other energy subsidies. The CBO has a chart.
(Excerpt) Read more at americanthinker.com ...
Facts just never seem to get in the way of Democrat talking points.
Facts, and consistency, never seem to get in the way of the Democrat AGENDA.
Tax breaks aside, they’re still paying huge (spelled H-U-G-E)
Logically raising taxes on oil companies to lower gas prices makes little sense, but when you start talking about deficit reduction with entitlement reform as Republicans did last year, the idea of raising taxes on anything or anyone unusually successful becomes appealing to many voters. This is a simple rule that Republicans ignore at their own peril
FNC Liberal O Reilly wants a law to prohibit export of domestically produced oil. This is as brilliant as his ethanol idea he pushed about 5 or so years ago.
Let’s see if I get this ...
Here’s how my dictionary defines SUBSIDY:
SUBSIDY: Grants of money, especially governmental, to aid private undertakings.
So, If government GIVES your business money from tax payers, it is a subsidy.
If government does not take more money from your business, it is also a subsidy?
Aren’t we giving additional meaning to the word now?
I would like a comparison of the so called subsidies to the taxes payed by the oil/gas industry.
If they are paying 20 times the tax break amount in actual payments to the federal treasury, can it be called a subsidy?
Americas Oil and Gas Industry: Paying Their Share
Americas oil and natural gas industry supports 9.2 million jobs throughout the economy and 7.5 percent of our GDP.
Our industry provides higher-than-average wages and helps ensure our nations energy security. In the process, the
industry generates tax revenues from operations and sales of products that contribute billions every year to federal,
state and local governments.
Major energy producers pay at least their fair share and are a tremendous source of public revenue.
- $1 Trillion Total income taxes paid or incurred by major energy producers from 1980 through 2009.
- $376 Billion Total income taxes paid or incurred for the five years from 2005 to 2009 with over $110 billion paid to U.S. taxing authorities.
- $35.7 Billion Income taxes paid or incurred in 2009 alone by major energy producers.
- 41.1 percent U.S. oil and gas industrys 2010 income tax expenses as a share of net income.
- 26.5 percent All non-oil and gas S&P Industrials income tax expenses for 2010.
Non-Income and Excise Taxes
- $362 Billion Excise taxes paid on petroleum products to U.S. taxing authorities by the oil and natural gas industry from 2005-2009.
- $68 Billion Other non-income taxes paid to U.S taxing authorities from 2005-2009, not including excise taxes collected and remitted on petroleum products.
Rents, Royalties, and Fees
- $30 Billion Land use fees paid to the U.S. government between 2008 and 2010, over $5 billion more than the 2009 budgeted discretionary spending for the Department of Energy.
- $187 Billion From 1982 through 2010, the United States government collected rent, royalty, and bonus payments from the oil and gas industry totaling more than $187 billion,
with almost $96 billion having been received or accrued since 2001.
So what does this all mean? Americas oil and natural gas industry pays over $86 million every day in rents,
royalties, bonuses and income tax payments to the federal government. Calls to increase taxes on oil and natural gas
companies would undermine revenues returned to the federal government.
Using two econometric models, a Wood Mackenzie study finds that from 2011 to 2025, increased access to resources
generates $150 billion in additional government revenue; compared to increased taxes which decrease net revenues
by $128 billion.
I guess any of your money you are allowed to keep is a subsidy as far as the dems are concerned.
RE: If they are paying 20 times the tax break amount in actual payments to the federal treasury, can it be called a subsidy?
Again, why is NOT TAKING MORE TAXES FROM AN OIL COMPANY’s BUSINESS considered a SUBSIDY?
If a Mafia boss usually takes 30% of your business’ earnings and then a new Don comes along and decides to only take 25%, is the Mafia now SUBSIDIZING you to the tune of 5%?
We need another word for this because to people’s minds, they believe the government is GIVING oil companies money, when in fact, they are restraining themselves from taking MORE and calling it a subsidiy.
Especially since some are applied the exact same way to other industries without calling them subsidies to domestic manufacturing.
I have libs out here in CA almost everyday tell me that oil companies pay NO TAXES because that’s what the politicians tell them.
Exactly. Exxon makes only about 3c a gallon these days - world Governments impose massive ‘negative subsidies’ (taxes) on them.
The UK is the worst offender at about 3 dollars a gallon tax AND 20% VAT on the original fuel cost. Ouch!
Petrol is such a terrific fuel that it can carry the ludicrously heavy burden of Government. ‘Green’ energy OTOH sources are so bad that they absolutely require ludicrously heavy subsidy from Government to appear in the same market place.
Oil companies employ hundreds of thousands of people with high paying jobs. These folks are taxed plenty, and the rest goes back into our economy. No wonder Obama hates oil companies.
Imagine the horrors of allowing big corporations to keep more of the money they generated.
Does it really matter to us who Obama hates? We are far beyond liking him.
What is really important to get more voters to dislike him.
as are the consumers on every gallon purchased...
i posed a question to my father the other day...is the a *law* that prevents the oil companies or service stations from labeling the pumps with a breakdown of the myriad of taxes and fees that are being *bought* with every gallon ???
i would think that unless its simply *illegal* to do so, that the first time a CEO was called before CONgress and villified for gouging, that the stickers wouldve been in place by the end of the day...just good, cheap advertising and shining the light of truth back on the real theives who make more than the oil companies actually do...