Democratic Leaders Mislead on Gas Prices, Oil Taxes, Says Energy Expert

CNSNews ^ | May 17, 2011 | Matt Cover

[jazusamo]

(CNSNews.com) – Democratic leaders in both the House and Senate continue to make misleading statements about the effect their plans to raise taxes on oil companies would have on gas prices.

“We have to do something about the exorbitant gas prices, and the best way to start with that is to do something about the five big oil companies getting subsidies they don't need,” Senate Majority Leader Harry Reid (R-Nev.) said on the Senate floor on Tuesday.

Democratic Congressional Campaign Committee Chairman Rep. Steve Israel (D-N.Y.) was even more direct. Appearing on MSNBC’s Jansing & Co., Israel said that Congress could lower gas prices by eliminating tax write-offs for large oil companies.

“There’s lots of things we can do [to lower gas prices],” Israel said. “We can start by eliminating the $4 billion subsidy that big oil companies get.”

Democratic National Committee Chair Rep. Debbie Wasserman Schultz (D-Fla.) said May 6 on Fox News Channel’s Fox & Friends that the “first step” to bringing down gas prices was to eliminate tax write-offs for oil companies.

“The bottom line is that we are still giving ridiculous, unacceptable subsidies to oil companies and massive tax breaks that even they’ve said they don’t need,” Wasserman Schultz said. “That’s the first step that we need to take to try to bring our energy costs down.”

However, as Institute for Energy Research Senior Vice President Dan Kish told CNSNews.com, eliminating tax write-offs for oil companies will not have any effect on gas prices.

“If food prices are going up, would it make sense to tax farmers? Would that make prices go down or up? At the end of the day, basically, what they’re talking about is more un-American energy,” Kish said. “If you make it more expensive in the United States to produce energy, it will be produced somewhere else.”

Senate Democrats, led by Sen. Robert Menendez (D-N.J.) have introduced a bill that would eliminate tax write-offs for the five largest oil companies – ExxonMobil, Conoco-Philips, Chevron, BP America, and Shell – saying it is unfair that these large corporations continue to receive tax breaks when Congress is forced to cut the federal budget in other areas.

Kish pointed out that all five of the targeted oil companies are international corporations, and that the real result of Sen. Menendez’s bill would be to push their business overseas.

“The top five companies are in the distinctly unique position of being international; they have operations all over the world,” said Kish. “When the United States increases the cost of producing something here, they will simply produce it somewhere else where it won’t be taxed and the United States cannot tax them on it.”

Kish also said that in addition to not affecting gas prices, the Democrats’ plan may end up costing American jobs. Oil companies expend “massive amounts” of capital investments in oil exploration that results in job creation, he said, and higher taxes could drive that investment overseas.

“This is the nature of the beast,” he explained. “You’re either going to have that investment here or you’re going to penalize that investment, in which case it will go somewhere else. It means fewer jobs and more un-American energy.”

According to the American Petroleum Institute (API), the oil and natural gas industry in the United States supports 9.2 million jobs and 7.5 percent of GDP. It also generates nearly $100 million in revenue for the federal government every day.

[justice14]

Thanks.

[DaveTesla]

Here is some hard data:

The state and federal government taxes gas at 32.4 cents to 70.3 cents a gallon.

This does not include crude oil import taxes or taxes passed on from the refineries.

http://www.api.org/statistics/fueltaxes/

http://www.api.org/statistics/fueltaxes/upload/GASOLINE_TAX_MAP_MAY2011.pdf

[Brad from Tennessee]

And we can revive the real estate market by eliminating the Home Mortgage Interest Deduction.

[justice14]

Thanks a lot!

[justice14]

Another question. This lists cents per gallon, which is what I asked for. But I thought I heard it was a percentage per gallon. Which would point out even more govn’t corruption. Is this true.

[Gilbo_3]

depends on locale whether its 'per gal.' or '% of price'...

its definately to goobermints advantage in the latter to see pump prices rise...

and remember that these are merely 'at the pump' taxes which is beyond all the various taxes/'fees'/regulators crap that is embedded at every level of production before it reaches the pump...

after all this, *then* the companies are taxed on their profits, which of course has been folded into the beginning price of doing business, and the cycle repeats...

i keep thinkin of all those 'gov credit cards' that are used by the millions everyday, and the 'taxes' that the co-signer [ie taxpayer] is recycling for every gallon in the speedtrap cruiser...

[justice14]

Thanks.

[blueyon]

At yesterdays (5/17/11) Oil & Gas Industry Tax Breaks Hearings, Tom Coburn gave one of the best speeches there. If anyone can find a video, please post.
I watched it on CSPAN.
Basically he said he is amazed at the lack of accounting knowledge the Senate has, that the reason why oil is so high is because the dollar is weak due to our high debt and since oil is “traded” world wide any regulations placed will have little effect on the price...it truly is worth listening to if anyone can find it!

[doug from upland]

Thanks for sharing that. Amazing.