Motorists are paying nearly $4 for a gallon of gasoline as the oil industry reaps pre-tax profits that could hit $200 billion this year. This makes another big number hard to take: $4.4 billion. That’s how much the industry saves every year through special tax breaks intended to promote domestic drilling.
How do they survive with huge profits and taxpayer underwriting?
Oil industry advocates, a group that includes most Republicans in Congress, argue just the opposite. They say oil companies reinvest tax breaks into exploration and production, which ultimately generates more tax dollars and increases the supply of oil. They say eliminating tax breaks will raise the cost of doing business and lead to higher gas prices.
Liars. Politicians and oil execs share that characteristic. If their lips are moving, they’re lying.
“When you see profits that include the word billions, people automatically think someone is getting screwed,” says Christine Tezak, Senior Energy and Environmental Policy Analyst at Robert W. Baird & Co. “The fact that the (oil industry) is getting any breaks at all has become a sore spot.” The price of oil is so high that removing these tax breaks would likely have little to no effect on domestic oil production. There are other factors that make the U.S. a highly attractive place to drill: it’s politically stable, it has good roads and pipelines, and it’s the world’s biggest energy consumer. And the industry would remain hugely profitable even though eliminating the tax breaks would increase its U.S. tax bill by nearly 70 percent.
Makes you feel like throwing something doesn’t it.
- How the oil industry saves $4.4B a year on taxes (sfgate.com)
- Oil Companies Demand Continued Tax Breaks (wordsmithworks.org)