Time to spank "Big Oil" again
Well Gas has hit and stayed around $4 a gallon and the Politicians in DC are sounding the war drums.
Once again it's Big Oil's fault. I mean someone has to take the fall right?
I consider the political theater in DC sort of like a shell game. The real reasons keep being shuffled
around in faster circles so maybe you won't look to hard to find them. Obama has said loudly and quiet often that
under his administration more oil has been produced since 2003.
"In fact, last year, America’s oil production reached its highest level since 2003," President Obama
Well that's not really true. All of the oil being produced in that statement is from oil permits from the Bush administration.
Obama is either blaming Bush or taking credit for Bush policies. I really wished he would make up his mind.
Facts are oil production under Obama has DROPPED 43% from the all time high and Gulf oil production has dropped
to an all time low. The permit process has slowed to a crawl under Sunstein the Regulatory czar.
We keep hearing about the Subsidies given out to the Oil Companies most are not factual at all.
Fact 1. The total Tax breaks given to oil Companies is $2.4 Billion dollars not $21 billion. The other $18 billion is for Nuclear not Oil.
Interesting fact: Tax breaks for Ethanol production is $2.8 Billion dollars.
Fact 2. The US tax code has allowed corporate tax payers the ability to recover costs and to be taxed only on net income.
These are part of what politicians are calling "Subsidies".
Here are just a few more:
"Intangible Drilling Costs – Companies which engage purely in energy exploration and discovery can recover their costs related to exploration at tax time at a rate of 100%. This lessens the burden on energy providers for the number of “dry holes” which may be found in the process. Integrated companies (i.e. “big oil”) can recover these exploration costs at 70%. Not a subsidy.
Domestic Manufacturer’s Deduction (Section 199) – A deduction (not a credit) equal to 9% of income earned from manufacturing, producing, growing or extracting in the United States, is available to every single taxpayer who qualifies in the U.S. The oil and gas industry, and only the oil and gas industry, is limited to a 6% deduction.
Percentage Depletion – The percentage depletion deduction is a cost recovery method that allows taxpayers to recover their lease investment in a mineral interest through a percentage of gross income from a well. This depletion method is not available to companies that produce oil as well as refine and market it (i.e. “Big Oil”.) This is available to all extractive industries (gold, iron, clay, etc) in the US and is in no way unique to the oil and gas industry."
Fact checking MSNBC:
“It’s estimated that every year the United States Government gives approximately 4 billion dollars in tax subsidies to oil and gas companies.”
Fact: Unlike other sources of energy—wind, solar, ethanol, etc—the government does not give oil and natural gas producers any grants or loan guarantees, nor does it impose any consumption mandates. Since oil and natural gas companies receive none of the above actual subsidies, Uygur targets deductions these companies can write off on their income statement:
Subsidy?: Allowing a company to keep its own money is not a subsidy. The government taking money from Mr. Uygur and giving it to me is a subsidy, I have no claim on that money. Allowing Uygur to keep his own money, by employing a tax credit or deduction, is not a subsidy.
Uygur: “If I got $4 billion a year in subsidies, I’d be pretty good in that sport to. I wouldn’t have to work very hard at all.”
Fact: Since 2008 Congress has spent $65 billion funding renewable projects. Even after receiving enormous taxpayer subsidizes; these forms of energy are anything but ubiquitous. Again, the $4 billion Ugyur calls a subsidy is anything but—the government doesn’t spend a single dollar facilitating oil and natural gas production.
Uygur: “Meanwhile, we all know that these companies are pulling in absurd profits. Last year alone, the top five oil and gas companies earned a total of $77.4 billion in profits.”
Fact: Implicit in this statement is the sentiment that oil and natural gas companies are not “paying their fair share,” and gaming the system to achieve profits. This could not be farther from the truth: paying nearly $100 million a day in income taxes—and $300 billion in total income taxes between 2004-2008—the oil and natural gas industry tax expenses averages 48 percent, compared to 28 percent for other S&P Industrial companies. This number does not include an additional $60 billion in non-income taxes or $350 in excise taxes paid on petroleum products.
So the political demagogy has begun. These same politicians that scrambled for the TV cameras to shed a tear over the burden of the "Middle Class" is at it again.
They really want to help? Well here's an idea for them. Let the Oil Company's drill for oil. Let them explore areas that the GOVERNMENT has placed off limits. Let's produce and develop our Natural Gas fields. Then and only then should we sink Billions in Obama's "Green" energy initiatives.
One other thing that can do to help the "Middle Class".. Windfall profit taxes. That's right I said it.
The $0.40- $0.60 cents per gallon the Government earns while doing nothing to bring that gas to market is a real windfall profit not the $0.07 per gallon the Oil Company's earn. So they want to help.
Lower Taxes on the gas.
It's Washington that's addicted to oil. Just like they are addicted to Tobacco. It's all money for them to spend on their little pet projects for the votes they get in return.