Fiscal Cliff Winner: Tax Breaks for Oil and Gas Industries
The fiscal cliff deal reached in Washington proved to be a winner for the oil and gas industry on two counts.
First and foremost, the industry didn’t lose a dime of its billion-dollar subsidies. There was talk earlier in the year of maybe eliminating some of the lucrative tax breaks as a way to help reduce the budget deficit. Taxpayers for Common Sense estimates that oil companies will receive $78 billion in tax breaks and subsidies between 2012 and 2017. In March 2012 a majority of senators did vote in favor of the Repeal Big Oil Tax Subsidies Act, which would have eliminated $2.4 billion in deductions gained by the five biggest oil companies, but the bill needed 60 votes to pass.
By the end of the fiscal cliff negotiations, Republicans and Democrats left all of the subsidies in place.
“Trimming just a handful of these breaks for the big five companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—would've raised $24 billion over the next decade” for the U.S. Treasury, noted Andy Kroll at Mother Jones.
But the good news didn’t stop there for ExxonMobil and others. Once Congress and President Barack Obama agreed on a plan, oil prices on the stock market rose to their highest levels in nearly three months, making those in the petroleum business even richer.
In 2011, ExxonMobil made more than $73 billion, but paid only $1.5 billion in federal income taxes.
-Noel Brinkerhoff, David Wallechinsky
To Learn More:
Big Oil's Billions in Tax Perks Survive Fiscal Cliff Deal (by Andy Kroll|, Mother Jones)
Oil Rises On US Fiscal Deal, Hits Highest Since Oct (by Robert Gibbons and Matthew Robinson, Reuters)
Petroleum Industry Claims Cutting Its Tax Breaks is “Discriminatory” (by Noel Brinkerhoff and David Wallechinsky, AllGov)
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