Saturday, November 5, 2011
Eliminate Big Oil Tax Loopholes To Help American Economic Recovery
I resent the obscene amount of money spent by the American Petroleum Industry in their ads that run every 15 minutes on television trying to brainwash Americans into believing that the oil and gas industry is the “savior of American jobs”, “a partner in creating wealth for ordinary people,” and “responsibly developing clean energy sources”. The hundreds of millions spent for these ads by the oil and gas industry come directly from us taxpayers because of favorable tax loopholes that allow big oil companies to pay less in taxes helping to earn them $1 trillion in profits in the past decade. One oil company, ExxonMobil, pays an effective tax rate that is less than that of the average American family. They are running these ads to influence public opinion because the American Jobs Act that would promote employment AND pay down the debt would repeal their tax loopholes. Tax loopholes like the 9% tax credit oil companies get as a “domestic manufacturer” that will return $4.4 billion in taxes back to the oil companies this year alone. Other tax credits they get include a dollar for dollar tax credit on foreign taxes they pay for drilling overseas. Originally set up in the 1920’s by Congress to offset royalty fees charged by Saudi Arabia, the oil companies get to adjust their corporate income taxes for profits earned in overseas drilling dollar for dollar on foreign income taxes paid. In the 1970’s, American oil companies actually demanded that the Chinese establish an income tax on US oil companies drilling there so they could take advantage of this tax loophole! The sweet thing is the oil companies benefit twice with foreign income taxes, both in the refund they get on US income taxes and in that the foreign income taxes are primarily used to improve infrastructure (like roads, airports, ports, security, etc.) that benefits the drilling companies. Today, we need to balance our budget with the help of those who have been most favorably affected by tax laws. Their propaganda that making them pay their fair share of taxes would hurt energy development and jobs is bogus. Between 2005 and 2010, Chevron, ExxonMobil, Shell, and BP earned $546 billion in profits, but cut their work force by 11,200 workers. Despite $78 billion in profits in 2010 for Chevron, Shell, Conoco Phillips, BP, and ExxonMobil, they spend a mere 1.2% of that on alternative fuels research. I think if we have a choice to spend American taxes on highly profitable oil companies or on helping to pay down the debt and preserving our economy to benefit the 99% of us, it’s a no brainer. But we have to speak a lot louder than the lobbyists to tell Congress to vote for the American Jobs Act provisions. And, in 2012, we will remember whose side they were on when we go to the voting booth.