Big Oil is all about Big Handouts

Corporate socialism is alive and well. Isn’t it interesting to see the Republicans do their best to provide a very small safety net to help average Americans who are unemployed yet so willingly go along with massive handouts to Big Oil? Politicians are always so quick to pull out the rug on those most in need yet the richest of the rich are always being supported with handouts that dwarf the social safety net. How does this possibly pass the smell test? Big Oil is the most profitable industry on the planet yet they still need help? Let them make their own money on their own dime instead of freeloading from everyone else.

According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.

And for many small and midsize oil companies, the tax on capital investments is so low that it is more than eliminated by var-ious credits. These companies’ returns on those investments are often higher after taxes than before.

“The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant,” said Senator Robert Menendez, Democrat of New Jersey, who has worked alongside the Obama administration on a bill that would cut $20 billion in oil industry tax breaks over the next decade. “There is no reason for these corporations to shortchange the American taxpayer.”

Oil industry officials say that the tax breaks, which average about $4 billion a year according to various government reports, are a bargain for taxpayers. By helping producers weather market fluctuations and invest in technology, tax incentives are supporting an industry that the officials say provides 9.2 million jobs.

Only this industry or possibly Big Finance could see $4 billion as “a bargain.”

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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