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Big Oil Tax Bill Voted Down
On March 29, the Senate voted down the Repeal Big Oil Tax Subsidies Act (S. 2204). The bill was introduced by Sen. Robert Menendez (D-NJ) and would change several tax benefits for large oil companies.
The bill would have limited the deductibility of foreign tax credits, reduce the Sec. 199 manufacturing deduction and change from percentage to cost depletion. It also would repeal expensing of intangible drilling costs and require those items to be amortized.
While big oil companies would pay approximately $24 billion in additional taxes over 10 years with these changes, approximately $11.7 billion of that amount would be allocated to energy tax extenders. These had previously been proposed by Sen. Debbie Stabenow (D-MI). They include credits for energy-efficient homes, for biodiesel and for cellulosic biofuel.
President Obama supported the bill to require major oil companies to pay additional tax. He stated, "With record profits and rising production, I'm not worried about the big oil companies. That's why I think it's time they got by without more help from taxpayers who are already having a tough enough time paying the bills and filling up their gas tank."
Sen. Menendez supported the bill on the Senate floor and stated, "People I talk to in New Jersey want to know why they are stuck paying close to $4 for a gallon of gasoline while these companies rake in billions of dollars of subsidies and record profits. And they want to know why these oil companies should continue to enjoy billions of dollars in subsidies when we could be using that savings to invest in alternatives to oil and lower the deficit."
Senate Republican Leader Mitch McConnell (R-KY) responded to Sen. Menendez. He pointed out that taxes on energy would not result in lower gas prices. McConnell commented, "As Americans filled up their cars with gas this weekend, I'm sure a lot of them wondered how much higher gas prices could get. Well, today, the Democratic-controlled Senate plans to send these folks a message: If they had their way, gas prices would be even higher."
Editor's Note: Your editor and this organization take no specific position on the above comments. This information is offered as a service to readers because the cost of gasoline impacts all Americans.
The bill would have limited the deductibility of foreign tax credits, reduce the Sec. 199 manufacturing deduction and change from percentage to cost depletion. It also would repeal expensing of intangible drilling costs and require those items to be amortized.
While big oil companies would pay approximately $24 billion in additional taxes over 10 years with these changes, approximately $11.7 billion of that amount would be allocated to energy tax extenders. These had previously been proposed by Sen. Debbie Stabenow (D-MI). They include credits for energy-efficient homes, for biodiesel and for cellulosic biofuel.
President Obama supported the bill to require major oil companies to pay additional tax. He stated, "With record profits and rising production, I'm not worried about the big oil companies. That's why I think it's time they got by without more help from taxpayers who are already having a tough enough time paying the bills and filling up their gas tank."
Sen. Menendez supported the bill on the Senate floor and stated, "People I talk to in New Jersey want to know why they are stuck paying close to $4 for a gallon of gasoline while these companies rake in billions of dollars of subsidies and record profits. And they want to know why these oil companies should continue to enjoy billions of dollars in subsidies when we could be using that savings to invest in alternatives to oil and lower the deficit."
Senate Republican Leader Mitch McConnell (R-KY) responded to Sen. Menendez. He pointed out that taxes on energy would not result in lower gas prices. McConnell commented, "As Americans filled up their cars with gas this weekend, I'm sure a lot of them wondered how much higher gas prices could get. Well, today, the Democratic-controlled Senate plans to send these folks a message: If they had their way, gas prices would be even higher."
Editor's Note: Your editor and this organization take no specific position on the above comments. This information is offered as a service to readers because the cost of gasoline impacts all Americans.
Published March 30, 2012
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