Posted on 05/12/2011 12:35:31 PM PDT by markomalley
Five executives from America’s leading oil companies were marched in front of the Senate Finance Committee Thursday morning for a public scolding, and told to defend industry tax breaks while Americans are being charged $4 for a gallon of gas.
In other words, Thursday was judgment day the CEO’s of the country’s five largest oil companies. And because most of the committee’s Republicans were attending a budget meeting at the White House, the executives were left to face a very partisan, very unhappy panel of Democrats.
Representing the scorned oil industry was John Watson of Chevron, Marvin Odum of Shell Oil, James Mulva of ConocoPhillips, H. Lamar McKay of BP America, and Rex Tillerson of ExxonMobil.
The hearing came after the committee’s chairman, Sen. Max Baucus, introduced legislation to repeal $21 billion over ten years in tax credits for oil and natural gas companies. In the House, however, legislation was passed Wednesday to actually expand access to offshore drilling.
Nonetheless, Democrats are on the warpath against record profits and tax breaks for an industry that they say should “share in the sacrifice”.
On the other side, Republicans defend the tax breaks, saying they facilitate increased access for drilling, which ultimately leads to lower costs for production and prices at the pump.
Sen. Orrin Hatch of Utah, the lone Republican in attendance for most of the hearing, argued that cutting the tax breaks would do nothing to ease pain at the pump.
The message brought by the industry execs: no one is asking for special government subsidies, only equitable treatment in the tax system that other industries receive.
“It’s not a subsidy; it’s a legitimate tax deduction,” said Tillerson.
(Excerpt) Read more at dailycaller.com ...
The first thing you should know about these oil-company loopholes is that the main items under discussion are not exactly oil-company loopholes. In 2004, Congress enacted an ill-considered tax break for manufacturing companies — one of many harebrained efforts to improve the U.S. economy by empowering politicians to hand out favors to their friends — and the definition of manufacturer was written in such a way as to cover just about any firm with investments in physical capital: Starbucks qualifies for manufacturers’ benefits under the relevant section of the law, known as Section 199. If you hire a guy to build a diving board for your home swimming pool, he’s as much a manufacturer as General Motors.
Which is to say, it is a stupid law, but it is not a law that grants special privileges to oil companies. Congress would be wise to repeal Section 199 in its entirety. In truth, our corporate tax code is a Hieronymus Bosch nightmare of political favoritism, market distortion, and rent-seeking representing the worst aspects of the unsavory nexus between Big Business and Big Government. For that matter, so is the individual tax code, and both should be reformed in roughly the same way: by eliminating exemptions, deductions, and hamfisted attempts at imposing economic policy through the tax regime. Such an approach to reform would, intelligently applied, enable us to reduce tax rates without reducing tax revenue, a very happy result indeed for a great many taxpayers.
http://www.nationalreview.com/articles/267021/oil-drill-editors
See post 61.
The tax code is not about revenue collecion- it’s about social engineering and doling out favors and punishment.
If it’s an evil oil company, it’s a “subsidy”. If it’s a wholesome , wonderful wind program, it’s an “investment”.
Yes, that is all it is. I wonder how many pension funds and individual retirees benefit from those profits as stockholders? Would this not just take that money directly from those stockholders and transfer it to the government?
The U.S. tax code is about handing out favors to political campaign donors to reassure re-election. I learned this 30 years ago from some economist who predicted that for this very reason it’ll be impossible to reform.
It’s a system no less corrupt than a banana republic.
Soon they’ll be grilling college presidents on why college tuition has outpaced inflation consistently for years.
Any day now.
Two words: Congressional subpoena.
They may not be actually under subpoena for this farce, but the threat is always there. If Congress “invites” you, you show up.
Nobody in his right mind would build a new refinery in the USA. Nobody. It simply is not going to happen. Expansions, maybe, but only if they have a good ROI and quick payback. Most US refinery investment lately has gone into environmental projects that reformulate gasoline and desulfurize diesel.
You're right on that point, but Orrin wasn't the only Republican there. Olympia Snowe was there also, fully accepting the premises of the Democrats, and she's a Republican.
I really, really wish these oil execs had the gonads to tell these Rat bastards to stick their summons where the sun doesn’t shine.
“Actually, at least a couple of the oil execs through it right back in their face. Rush played some sound bytes. Haven’t heard the whole thing, but at least there was some push back from the oil folks.”
Color me pleasantly surprised...
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