ALERT: Senate Moves to Bill Repealing Oil Subsidies - Voting on it tonight - TAKE ACTION!

By
Real Estate Broker/Owner with Buyers' Choice Realty

After a full week of no legislating, Senate Majority Leader Sen. Harry Reid [D, NV] has finally decided what bills to work on next. Yesterday afternoon an agreement was reached between the Democratic and Republican leadership to move to two oil-related bills — one, a Democratic proposal, that would repeal a handful of tax subsidies that benefit U.S. oil and gas companies, and the other, a Republican bill, that would require the government to conduct lease sales on offshore drilling sites. I’ve covered the House equivalent of the Republicans’ bill here, so I’ll focus on the Democrats’ bill for now.

The Close Big Oil Tax Loopholes Act was introduced by Sen. Bob Menéndez [D, NJ] and 28 other Democrats on May 10. It would repeal five tax breaks that Congress has enacted over the years to encourage oil companies to drill off of America’s shorelines, and it would close a loophole that U.S. oil companies have been using to disguise foreign royalty payments as taxes and deduct them from their domestic tax bill. The Congressional Budget Office has not published a revenue estimate for the bill yet, but a rough analysis from the Sunlight Foundation finds that oil companies benefited from nearly $4 billion in 2010.

All savings under the bill would be used towards balance budgets and paying down the debt. “The net amount of any savings realized as a result of the enactment of this Act […] shall be deposited in the Treasury and used for Federal budget deficit reduction or, if there is no Federal budget deficit, for reducing the Federal debt in such manner as the Secretary of the Treasury considers appropriate,” the bill states.

The Senate Republican leader, Sen. Mitch McConnell [R, KY], has already rejected ending oil tax breaks as a way to reduce deficits, arguing that it would, “raise the price of gas at the pump, send jobs overseas and make us get even more oil from Hugo Chavez." But the non-partisan experts at the Congressional Research Service took a look at the bill last week, and they don’t agree. They concluded that any impact on the price of gasoline from ending the subsidies would be so small that it would be hard to separate from other factors impacting price.

The price of gasoline is composed of four components. The largest component of the price is crude oil, 67%, followed by federal, state, and local excise and sales taxes on gasoline sales, 13%, refining expenses, 11%, and distribution and marketing expenses, 9%. If the proposed changes in tax policy result in increases in the price of gasoline, it would generally be through an increase in the price of oil. However, the price of oil is determined on world markets and tends not to be sensitive to small cost variations experienced in regional production areas. In the recent market environment, with the price of oil averaging approximately $90 per barrel over the period December 2010 through February 2011, and the current price over $100 per barrel, prices are well in excess of costs and a small increase in taxes would be less likely to reduce oil output, and hence increase petroleum product (gasoline) prices.

They also concluded that closing the tax loophole that American oil companies that drill overseas use to limit their U.S. tax bill could lead to increased domestic oil production:

The change in the dual capacity tax payer rules might make overseas investment that leads to foreign profits less attractive to the companies than investment in the United States. This could lead the firms to enhance domestic capital spending leading to increased domestic production and reduced oil dependency.

Despite all this, the Republicans are expected to vote en masse against the bill. They will probably filibuster it in attempt to prevent it from even being brought up for debate. Why? I don’t know. But there is reason to believe they’re not being independent actors here. Over the years, congressional Republicans have taken $306 million over the years from the oil companies whose tax bills would bill increased under the bill. That’s three-times the amount Democrats have taken from the industry.

Please contact your Senators!  Here is the National Switchboard number: 202 224 3121.  Every call makes a difference!  

You can also contact your Senators through Open Congress: http://www.opencongress.org/

The NRDC also has a petition you can sign: http://bit.ly/m0fDdM

I don't know about you, but I'm tired of these mega corporations paying less taxes than you and I do!  Enough already!

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Ambassador
530,235
Mirela Monte
Buyers' Choice Realty - North Myrtle Beach, SC
Myrtle Beach Real Estate

I'm hoping you'll join me in contacting our Senators and standing up against these abuses.   BP destroyed our Gulf.  Exxon destroyed parts of Alaska.  They dragged it through the court system all the way to the Supreme Court and paid almost nothing for the devastation they've cost.  These are greedy corporationg taking advantage of the American public and it's time we stand up against their abuse. 

PLEASE sign the petition, contact your Senators and make your message heard:

NOT MORE SUBSIDIES FOR THESE OIL COMPANIES!

May 17, 2011 08:14 AM #1
Rainer
77,960
Mike Morrison
Will & Will Real Estate Brokers, The Woodlands, Texas - Houston, TX

Mirela, OK, say we end the tax breaks for the Oil Co's. What happens next ? You'll get your wish of no drilling in the US or the Gulf of Mexico. That's OK also, as long as we have large stocks of oil. What happens then ? The price will be passed on at the pump. Do I have to remind you that corporations don't pay taxes. They only collect taxes from the consumer and pass it on to the government. 

If this legislation passes, then you will see the remaining jack up rigs sail east out of the ports of Galveston, Freeport and New Orleans, to the Atlantic toward a more friendly production enviorment. Maybe you could tell the 70,000+ rig workers they don't have a US Job any longer. I guess CHINA can pick up the slack. Think a minute about the ancillary service businesses that will also lay off folks. What happens to gas prices if 1 refinery goes off line?

Your friends in congress have killed nasa, why not the oil companies. Alas, I know the greenies don't give a rats ass about economic consequences. Let's see what's next? Natural Gas, Coal, Steel, Timber...

Here's a link to Baker Hughes interactive rig count map. http://gis.bakerhughesdirect.com/RigCounts/default2.aspx I don't see any active rigs in your neck of the woods. Look at the Gulf Coast. 

May 17, 2011 10:41 AM #2
Ambassador
530,235
Mirela Monte
Buyers' Choice Realty - North Myrtle Beach, SC
Myrtle Beach Real Estate

Mike:  I guess you didn't read the article.  This bill only stops big oil's subsidies.  It does nothing to stop the drilling. 

The Senate Republican leader, Sen. Mitch McConnell [R, KY], has already rejected ending oil tax breaks as a way to reduce deficits, arguing that it would, “raise the price of gas at the pump, send jobs overseas and make us get even more oil from Hugo Chavez." But the non-partisan experts at the Congressional Research Service took a look at the bill last week, and they don’t agree. They concluded that any impact on the price of gasoline from ending the subsidies would be so small that it would be hard to separate from other factors impacting price.

The price of gasoline is composed of four components. The largest component of the price is crude oil, 67%, followed by federal, state, and local excise and sales taxes on gasoline sales, 13%, refining expenses, 11%, and distribution and marketing expenses, 9%. If the proposed changes in tax policy result in increases in the price of gasoline, it would generally be through an increase in the price of oil. However, the price of oil is determined on world markets and tends not to be sensitive to small cost variations experienced in regional production areas. In the recent market environment, with the price of oil averaging approximately $90 per barrel over the period December 2010 through February 2011, and the current price over $100 per barrel, prices are well in excess of costs and a small increase in taxes would be less likely to reduce oil output, and hence increase petroleum product (gasoline) prices.

May 17, 2011 12:03 PM #3
Ambassador
530,235
Mirela Monte
Buyers' Choice Realty - North Myrtle Beach, SC
Myrtle Beach Real Estate

Mike:  Pretty much everything that you said is erroneous.  It is not based on reality, it is simply information disseminated by the corporate media to brainwash the consumer to support these measures which benefit big corporations.  If you care to do some research on the actual bills, you would be quite surprised by what you find. 

May 17, 2011 12:05 PM #4
Ambassador
530,235
Mirela Monte
Buyers' Choice Realty - North Myrtle Beach, SC
Myrtle Beach Real Estate

Mike:  Try the following to learn more about the particular bills in Congress:

 

Open Congress http://www.opencongress.org/

Tracking the United States Congress

Maplight - Money and Politics - Illuminating the connnection - S.940

These are all non partisan sources of information on the goings on of Congress, including all the bills currently in the House and the Senate.

 

 

May 17, 2011 12:11 PM #5
Ambassador
530,235
Mirela Monte
Buyers' Choice Realty - North Myrtle Beach, SC
Myrtle Beach Real Estate

Mike:  One more thing: Not having my own neck of the woods on that map means nothing to me for several reasons, the most important of which is:

I was just as devastated by what happened to my brothers and sisters in the Gulf, as if the Deepwater Horizon was in my own neighborhood.  This idea that if it's not happening to me it doesn't count, is not part of my thinking process.

 

May 17, 2011 12:17 PM #6
Rainer
77,960
Mike Morrison
Will & Will Real Estate Brokers, The Woodlands, Texas - Houston, TX

There now Mirela, feel better. As far as the congressional research service goes, we have a saying here in Texas; "Don't piss on my back and tell me it's rain". You've got your opinion, I've got mine. I guess since I don't agree with yours, I'm wrong & evil. Ain't America great ! We shall see.

 

May 17, 2011 06:32 PM #7
Ambassador
530,235
Mirela Monte
Buyers' Choice Realty - North Myrtle Beach, SC
Myrtle Beach Real Estate

Mike: Goodness, gracious, I would never say that!  You're a nice guy and the only reason we have a different opinion is because we garner our information from different sources, that's all.  Only a year ago I would have agreed with you.  A lot has changed since then.  My activism for the Gulf has changed my views. 

May 18, 2011 05:35 AM #8
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Mirela Monte

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