"Cut $20 billion in spending by ending taxpayer-funded subsidies to the five biggest oil companies."
$20 billion is a ridiculous amount to cite. The figure the other Democrat Socialist Statists use when demagoging this fabricated issue is around $4.3 billion in so-called government "subsidies".
Senator Brown and President Obama talk about huge "subsidies" as if taxpayers are signing billion dollar checks to oil and gas companies. But oil companies do not get subsidies. Rather, like every other business, they are allowed to take tax deductions for the expenses they incur. A tax deduction and a government subsidy are not the same.
The domestic manufacturing tax deduction that oil and gas companies receive is a general tax deduction that goes to all domestic manufacturing. Producers of clothing, roads, electricity, water and many other goods produced in the United States are all eligible for the manufacturer’s nine percent tax deduction. Congress already imposed a tax hike for oil and natural gas companies by freezing the deduction at six percent for just that industry.
The only tax in which the oil companies seem to get special treatment compared to other industries is intangible drilling costs. The amount of that subsidy would be $0.78 billion per year-enough to fund less than two hours of federal spending in 2011, and not even half the amount we are lending a foreign and state-owned oil company for drilling offshore in Brazil.
Oil companies already pay tax rates of 40-50 percent of income. For one company, Exxon, in one quarter of one year, those amounts was over $8 billion, or almost double the so-called "subsidy" for all oil companies for an entire year.
Profit is the amount of money a company has made. Profit margin is the amount of money your company or business has earned as a percentage of total revenue. The profit margin for the gas and oil industry is around 6.2 percent.
When politicians use the words "subsidies" and "tax deductions" interchangeably it is a deliberate attempt to mislead Americans. A purposeful, calculated lie.
Senator Brown and President Obama are Leftist anti-capitalists who openly advocate government "solutions" and government control. They attack the oil industry and its product because oil is the lifeblood of the American capitalist free market economy. Oil is the fuel of Freedom.
thank you!