At Thursday's hearing, Oregon Sen. Ron Wyden, a Democrat, played a video of a 2005 congressional hearing in which oil company executives said they did not need generous tax breaks because oil was selling at $55 a barrel. As the hearing commenced, the price per barrel hovered just below $100.
"You all said you didn't need them in 2005," Wyden said."You seem to be telling a different story today."
http://www.msnbc.msn.com/id/42996868.../#.TyGOlBzLzks
Menendez, Brown, McCaskill to Big Oil: Your Subsidies Are Over
Senators Announce Legislation to End Tax Subsidies for “Big 5” Oil Companies and Call On Republicans To Join Effort To Close Loopholes
May 10, 2011
WASHINGTON – With the nation’s five largest oil companies taking home nearly $1 trillion in profits over the past decade, a group of Democratic Senators today announced legislation to finally put an end to the unfair tax subsidies that only benefit Big Oil’s bottom line and CEOs. As families are paying more than $4 per gallon in gas prices and doing their part to address the country’s growing deficit, Big Oil needs to step up to the plate and share in the sacrifice to help balance the budget.
U.S. Sens. Robert Menendez (D-NJ), Sherrod Brown (D-Ohio) and Claire McCaskill (D-Mo.), announced the introduction of the Close Big Oil Tax Loopholes Act, which will put an end to taxpayer handouts to the 5 largest oil companies making record profits, and use the billions in savings to help reduce the deficit. The Senators also called on Republicans to support the effort to close the loopholes and join other Republicans, including Speaker Boehner and Representative Ryan, who have voiced support for cutting subsidies.
“At a time when families are feeling the pain at the pump and our deficit keeps growing at an alarming rate, we simply can’t afford to keep giving away billions in taxpayer handouts to oil companies that are doing nothing to help lower prices. The ‘Close Big Oil Tax Loopholes Act’ is based on a simple premise: we need everyone to do their share to lower the deficit, not just working families and the elderly,” Menendez said.
"It's bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump. They shouldn't need to subsidize the oil industry through the tax code as well. Big Oil is reaping big profits while working- and middle-class Ohioans struggle to make ends meet. It's about time this corporate welfare meet its end," Brown said.
“If we are going to get serious about addressing our national debt, we can no longer afford to keep giving away taxpayer's money to the most profitable companies in the world. There are going to be some tough decisions when it comes to cutting back, but I hope we can agree that our government writing checks to oil and gas companies with tax dollars should be on the chopping block,” McCaskill said.
"For years, the world's biggest oil companies have slipped their way through every loophole in the book to pad their profits at the expense of American taxpayers," Tester said. "This bill restores fairness and holds these corporations accountable to taxpayers, who deserve no less."
According to a recent report from Citizens for Tax Justice, Big Oil companies spent most of their profits in the purchase of their own stocks and boosting its dividends between 2005-2010. In 2010, four of the largest “Big Five” oil companies (excluding BP due to the oil spill) allocated only 18 percent of their post tax profits on exploration and 60 percent on dividends and stock repurchases. Link to the full Report: http://www.ctj.org/pdf/energy20110429.pdf
Summary of the bill:
Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers.
U.S. taxpayers are taxed on their income worldwide, but are entitled to a dollar-for-dollar tax credit for any income taxes paid to a foreign government. U.S. oil and gas companies have been accused of disguising royalty payments to foreign governments as foreign taxes. This allows them to lower their taxes in the U.S. The bill would close this loophole that amounts to a U.S. subsidy for foreign oil production for the Big 5.
Limitation on deduction for income attributable to the production of oil, natural gas, or primary products thereof.
In 2004 Congress enacted Section 199, the domestic manufacturing tax deduction. In 2008 Congress froze the Section 199 deduction at 6% for all oil and gas activity. The bill eliminates the Section 199 deduction for the Big 5.
Limitation on deduction for intangible drilling and development costs.
Would deny the Big 5 oil companies the option of expensing Intangible Drilling Costs (IDCs) and require such costs be capitalized. IDCs are expenditures such as wages, fuel, repairs, hauling, and supplies necessary for the drilling of oil wells. Currently, integrated oil companies can expense 70% of the cost of IDCs. The bill requires the Big 5 to capitalize all of its IDC costs.
Limitation on percentage depletion allowance for oil and gas wells.
Firms that extract oil and gas are permitted a deduction to recover their capital investment under one of two methods. Cost depletion allows for the recovery of the actual capital investment—the costs of discovering, purchasing, and developing the well—over the period the well produces income. Under this method, the taxpayer’s total deductions cannot exceed its original investment.
Percentage depletion allows the cost recovery to be computed using a percentage of the revenue from the sale of the oil or gas. Under this method, total deductions could (and often do) exceed the taxpayer’s capital investment. The bill repeals percentage depletion for the Big 5.
Limitation on deduction for tertiary injectants.
Tertiary injectants are used in enhanced oil recovery to drive more oil from an existing well. Currently, oil companies are allowed to deduct the cost of tertiary injectants rather than capitalizing their costs and recovering them over time. The bill requires the Big 5 to capitalize the cost of tertiary injectants it uses during the year and recover those costs over time.
Repeal of Outer Continental Shelf deep water and deep gas royalty relief
Repeals Sections 344 and 345 of the Energy Policy Act of 2005. Section 344 extended existing deep gas incentives and Section 345 provided additional mandatory royalty relief for certain deepwater oil and gas production. These changes will help ensure that Americans receive fair value for Federally-owned fossil fuel resources.
Deficit Reduction
All savings realized as the result of the bill’s elimination of the tax breaks and other subsidies currently going to the major integrated oil companies are devoted to deficit reduction.
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End Big Oil's tax breaks now
http://finance.fortune.cnn.com/2011/...ax-breaks-now/
By Dan Primack May 26, 2011: 5:00 AM ET
It's time to truly level the playing field and give all forms of energy a chance to compete.
To hear some tell it, we have lost our collective appreciation for free markets. So writes CNBC anchor Joe Kernan in his new book about "defending our kids from the liberal assault on capitalism." Or former BB&T CEO John Allison, who offers $2 million grants to colleges that create "courses in capitalism." And I agree. Specifically, we've forgotten one of capitalism's most fundamental promises: New companies deserve the opportunity to succeed.
That's why I assume Joe, John, and their Randian peers must be furious with Senate Republicans for recently defeating a Democratic proposal to end billions of dollars in tax breaks for American oil companies.
The D.C. debate over fossil fuel handouts was, of course, framed within a short-term political prism. Democrats hoped to blunt criticism that they don't care about deficits, while Republicans wanted to rally their tax-phobic base. But ending oil and gas subsidies should be about something much larger: creating a marketplace in which renewable-energy companies can compete fairly with fossil-fuel incumbents. For too long we've heard petroleum advocates say that solar, wind, and biofuel are failed experiments. They've had their chance, but have been unable to demonstrate cost-effectiveness.
What this ignores, of course, is that American oil and gas companies have had a century of built-in advantages. For example, they are allowed to deduct "intangible drilling costs" -- including labor and drilling fluids -- the moment a well is tapped (even if it proves to be dry). And then there's the "depletion allowance," which allows certain extractors to shelter around 15% of a well's production from the IRS. And deductions for royalties paid to foreign governments. And the oil and gas liability cap that remains at just $75 million, more than a year after the BP (BP) rig explosion. Then there's Section 199, which allows profitable oil and gas companies to deduct 6% of net income.
To be sure, there also are tax breaks for green-energy companies. But most of those handouts are temporary -- including low-interest loans from the 2009 stimulus -- with renewables receiving only around 5% of some $20 billion worth of federal energy tax breaks (excluding subsidy-rich ethanol, which is a separate but equal tax tragedy). Some of these subsidies are very important to individual companies, but the renewable-energy industry's best long-term play is to support the elimination of all federal energy handouts. "If the playing field is truly leveled by a good-faith proposal to eliminate all subsidies for fossil fuels and renewables, I am very confident that renewables will compete effectively," says Josh Green, a venture capitalist focused on the clean-tech market.
Solar-energy-generation costs, for example, fall around 8% each year as technologies improve and capacity expands. U.S. Energy Secretary Steven Chu recently said that he could see solar and wind "being cost competitive without subsidy with new fossil fuel" by the end of this decade. Imagine how must faster the gap could close if the competition wasn't on government-prescribed steroids.
The oil industry counters by claiming that the elimination, or even reduction, of its federal largesse will cost both production and jobs. Hogwash. U.S. oil companies drill domestically for one reason: Their product can be found here. And that will continue as long as there is local supply and global demand. If U.S. crude oil production was tied directly to taxes, then it should have grown between 1999 and 2007, when federal subsidies doubled. Instead, it actually fell 14%.
What oil companies truly fear, I think, is unshackled innovation -- and even a modest loss of market share. Rather than trying to outsmart the upstarts, the oil companies spend their time trying to scare us into codifying their supremacy. ConocoPhillips (COP) CEO James Mulva recently said that a Senate proposal to end $4 billion of oil subsidies was "un-American." No, Mr. Mulva, it's pro-capitalism.
You don't want to know the truth.........., but here it is.
"Big oil has obviously received more help than most. I thought you might be able to acknowledge tthere is a connection between the sums of money contributed by various industries to politicians and the benefits they derive from that money. Follow the money and you will see that big oil has disproportionately been helped through tax policy."
That is a BALD FACED LIE! The playing field is LEVEL. Anyone who manufactures anything can take the deduction.
Read on if you dare: http://www.journalofaccountancy.com/...p/20102727.htm
And how "fair" is it that BIG OIL is ALREADY penalized 3%??
Read on if you dare: http://www.api.org/policy/tax/apikey...Tax_Sec199.pdf
And one last one, if you dare: http://www.mikestopa.com/2011/02/oil...199-deduction/
DON'T READ THEM! You may awaken from your ignorant bliss. But if you dare, the last one is good.
Ignorant Bliss..................................
Glad you found the thread. I wanted to educate you. I was tired of your "bald face lies".
http://finance.fortune.cnn.com/2011/...ax-breaks-now/
Did you read this? Have you looked back at all the tax advantages oil, coal and gas companies have gotten over many years?
Last edited by Havakasha; 01-26-2012 at 02:38 PM.
"For years, the world's biggest oil companies have slipped their way through every loophole in the book to pad their profits at the expense of American taxpayers," Tester said. "This bill restores fairness and holds these corporations accountable to taxpayers, who deserve no less."
According to a recent report from Citizens for Tax Justice, Big Oil companies spent most of their profits in the purchase of their own stocks and boosting its dividends between 2005-2010. In 2010, four of the largest “Big Five” oil companies (excluding BP due to the oil spill) allocated only 18 percent of their post tax profits on exploration and 60 percent on dividends and stock repurchases. Link to the full Report: http://www.ctj.org/pdf/energy20110429.pdf
I understand you are a little niave about politicians corrupt ways. More education.
http://www.adn.com/2011/12/17/222290...sson-from.html
Big Oil Bailout a lesson from history book
SHANNYN MOORE
COMMENT
Published: December 17th, 2011 07:48 PM
Last Modified: December 17th, 2011 07:49 PM
"Those who don't know history are destined to repeat it."
In 2006, the FBI raided the offices of legislators. Lawmakers were prosecuted for selling their votes to help pass Gov. Frank Murkowski's Big Oil Bailout, the Petroleum Profits Tax.
The PPT tied 85 percent of state revenue to the efficiencies of the oil producers while simultaneously incentivizing them to be inefficient; the higher their costs, the more they could write off, the lower their taxes, the less money for Alaska. Great deal for the producers at the expense of Alaskans.
And now, just five years later, Gov. Sean Parnell is trying to pass his own Big Oil Bailout, known as HB110. History, it seems, is repeating itself.
Bob Bartlett was prophetic. As Alaska's congressional delegate, he addressed the Alaska Constitutional Convention on Nov. 8, 1955. He spoke of the importance of our natural resources and predicted an influx of resource development interests. "Unfortunately some of these interests will not be scrupulous in the choice of measures to achieve their ends . . . lobbying activity on a scale never before seen will take place in the capital when Alaska becomes a state."
Bartlett also warned of "exploitation under the thin disguise of development. The taking of Alaska's mineral resources without leaving some reasonable return for the support of Alaska governmental services and the use of all the people of Alaska will mean a betrayal in the administration of the people's wealth."
Bartlett's words were never more relevant to the lobbyist-infected political landscape we find ourselves in today, one where the oil industry has literally bribed legislators and raised millions to elect oil-friendly politicians who have returned the favor by ignoring their constitutional obligation to secure the "maximum benefit" for Alaskans.
The oil companies have systematically taken over the Chamber of Commerce, Resource Development Council and policy groups. One of those groups recently ginned up fake legislative report cards. A nonpartisan Legislative Research Report showed that lawmakers who received F and D grades voted virtually identically to those who got A's and B's. The difference? Those who supported the governor's bill to give $2 billion a year to the oil companies with no strings attached got A's, while those who didn't got D's or F's.
This past week, Senate President Gary Stevens -- one of the legislators with the audacity to question Parnell's oil tax giveaway -- walked into the lion's den. He addressed Commonwealth North, a group pushing to roll back oil taxes while billing itself as "Alaska's premier nonpartisan public policy forum."
Stevens didn't mince any words. He noted the bogus legislative grades were "sort of like a target. A giant Scarlet Letter. Though I prefer to think of it as a Red Badge of Courage." Stevens, a retired history professor, then schooled the chamberesque crowd.
Read more here: http://www.adn.com/2011/12/17/222290...#storylink=cpy
Read entire article by clicking on link
Oh, I see. You want the heavy hand of the government to level the playing field -- which means "TAKE" from those industries that prosper by providing a good or service to the public who demands that good or service, and "GIVE" to those industries that "YOU" deem worthy.Originally Posted by Havakasha
Glad you found the thread. I wanted to educate you. I was tired of your "bald face lies".
http://finance.fortune.cnn.com/2011/...ax-breaks-now/
Did you read this? Have you looked back at all the tax advantages oil, coal and gas companies have gotten over many years?
In other words, you want the state to control the means of production. Right?
http://en.wikipedia.org/wiki/Socialism
You could have heard a pin drop in the room as he reminded Alaskans about the Amerada Hess court case. The court found that from 1977 to 1992 the oil companies were guilty of "deliberate falsification in computing the price paid to Alaska for its royalty oil." The judge said the state was guilty of "inexcusable trustfulness" in dealing with the oil companies.
Stevens recalled the 1989 Exxon Valdez oil spill, which destroyed the fishing careers of thousands of Alaskans. He noted that the Alaska Oil Spill Commission said Alaskans were abused by Exxon's approach toward risk management, saying the company showed "a corporate culture of irresponsibility" that put profit over safety and risk mitigation.
Read more here: http://www.adn.com/2011/12/17/222290...#storylink=cpy
http://mygeologypage.ucdavis.edu/cow...15ch13oil.html
In fact, profit margins increased enormously in the 1950s and 1960s while production costs decreased. The volume of oil shipped increased, and the advent of supertankers decreased shipping costs while selling prices were increased. In the late 1960s, Middle East oil that was delivered to Europe and the United States at $2 and more a barrel had cost less than 40¢ to produce and ship. In 1957 half of Gulf's profits came from its share in the Kuwaiti oilfields. Aramco's profits averaged 57% of its invested capital in 1952*1961.
But the most creative way for the majorss to maximize their global profits and to satisfy the producer nations at the same time was to take advantage of tax legislation in the United States on "foreign tax credits." Suppose that Exxon pumped oil in Slobbovia, and paid tax at 35% on its operations there, at a time when company tax rate was only 15%. The foreign tax credit specified that Exxon could calculate the "extra tax" of 20% it had paid the Slobbovian Government, and could deduct that amount from its tax bill in the United States. As critics pointed out, this essentially involved the American tax payer in a direct subsidy to the Slobbovian government, except that the check was written on the American taxpayer by Exxon. All the majors used this tax avoidance scheme from the early 1950s, and it helped to maximize their profits.
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