With gas prices north of $4 a gallon across the Golden State, both of California’s Democratic Senators voted for a bill more likely to increase than decrease gas prices. Yesterday, Dianne Feinstein and Barbara “Call Me Ma’am” Boxer voted in favor of a motion to proceed on a bill which would “big oil tax loopholes“. In actuality, all the legislation would do would be to deprive certain oil companies of a benefit Congress granted to all companies in 2004. Christopher Taylor explains:
. . . the tax breaks in question are part of IRS Code Section 199, which allows any business to deduct certain expenses from their tax returns. The maximum allowable deduction is 9% of those expenses, and this is part of the tax code passed in 2004 under the American Jobs Creation Act.
The idea at the time was to make it possible for businesses to take some risks and if those risks didn’t pan out to get a tax break to reduce the pain and cost. This in theory would encourage businesses to expand and hire more.
These tax breaks appy to all businesses, not just oil companies, but the tax code specifically states that oil companies can only get a 6% break, not a 9%.
The Democrats backing the bill are merely grandstanding by bashing the oil companies. They seek to deflect anger over high gas prices directed at the incumbent Administration and onto big oil. Fortunately, the legislation failed, so, it was mostly a feel-good gesture for Senate Democrats, giving them the chance to vent against one of their favorite demons.
Even if the bill had passed, it would have done nothing to lower the price of gas. Indeed, if Congress punishes the companies supplying the product, they’re likely to see their costs increase. And said companies may well have to pass that cost onto consumers. The New York Times reported that even some Democrats
. . . criticized the initiative, saying it was misdirected and would do nothing to ease gasoline prices and could cost American jobs.
“Why are we harming an industry — five large oil and gas companies that work internationally, that employ 9.2 million people in the United States directly?” asked Senator Mary L. Landrieu, Democrat of Louisiana. “Why are we doing it?”
Mary, you’ve been a member of the Democratic caucus long enough. That answer should be easy. It’s all about looking for someone to blame instead of pushing legislation (i.e., for more oil exploration) that would actually address the problem.
So, we’re going to punish domestic oil production with higher taxes while subsidizing foreign energy production in Brazil.
Yeah, that’ll work.
Is it possible the Democrat agenda is to deliberately drive up the cost of energy to drive their various agendas? Force people to concentrate in urban areas and make them dependent on public transportation? Raise the price of food to combat obesity? Punish oil-producing red-states like Texas for not supporting the regime? Reduce the huge cost disparity between hydrocarbon and “green” energy?
In honest language, the Democrats want to *raise taxes* on oil companies.
As to how it could help the price of gas: It can’t. It’s illustration #38,288,981 that with Democrats, the solution to any problem is *always* to try to grow government. That is partly why I stopped being a Democrat a few years ago (went Independent).
When will people get it through their thick heads that CORPORATIONS DON’T PAY TAXES. People do, i.e., that expense gets shifted to the bottom line. Raising corporate taxes makes things more expensive, and the consumer pays the bill.
Get a clue, morons!
This is just another P.R. stunt on the part of Democrats….. However, whats really ticking me off is how senators Snow and Collins are proving to be RINOs. Had they voted no on this bill, it would have been a tie vote and Biden would have been called in to break the tie. We know how the VP would have cast his vote, but would have been more in our favor as a result.
It won’t. The Democrats are trying to deflect the high gas prices & inflation on energy by demonizing oil. Will it work? I don’t think so. This only worked in 2008 for Obama because people were tired of President Bush. Now, the Democrats have control of the White House, Senate, & House for the past 2 years, yet under Obama, gas prices have risen since he became President. President Obama has some explaining to do, but all the talk in the world will not keep the EPA from closing off Alaska & every other resource as gas prices continue to rise.
This is a political cheap stunt to backfire on the Democrats.
The math here is very simple.
To use an example, ExxonMobil, who does all the work of finding, producing, and transporting the gas, earns a profit of roughly two cents per gallon.
The Federal government, who does none of the work, earns a profit of eighteen-plus cents a gallon.
If the Obama/Pelosi/Reid cabal want to cut gas prices, they could stop taking their own profits and drop them overnight.
But they won’t. They’ll just lie, as liberals and Obama Party members do.
It’s simple: the bill did not intend to have any effect on gas prices. The bill was to stop one of the more egregious cases of corporate welfare. You asshats go from screaming about the deficit to screaming about the “unfairness” of elminating tax breaks for companies that clearly do not need them. Your corporate overlords are very happy, I am sure.
PeeJ, first, thanks for helping make my point!
And if this is such an egregious case or corporate welfare (as you claim), why then did Democrats not include (in their legislation) other companies who benefit from such tax breaks?
So, in Peej’s uniquely inane worldview, we should all be punished with higher gas prices so Dramacrat politicians can get their revenge on oil companies.
Oil companies pay the government 18.75% in royalties for oil taken off federal land.. Likewise, coal companies pay the feds 12.50% off the top, for the coal they mine in Uncle Sam’s back yard. However, companies that mine for gold in America, pay zero, zip, nada.
Now Harry Reid says he’s just looking out for the interests of the poor gold miners… And since most gold mines are located in Nevada, it’s not a stretch to imagine the Senator’s intentions are honorable. Well, except for one thing. Harry Reid received $750,000 in campaign donations from the owners of Nevada gold mines, not the people that labor in them.
.
I have been screaming at the TV for weeks waiting for someone to make this point. In fact, I almost crushed the handset of my phone some time ago trying to call in to C-Span when they had some administration apparatchik talking about this very thing.
These people are the ARCHITECTS of the high oil prices, and they baldly claim that closing a $4 billion tax deduction (not a subsidy as they like to say) will somehow reduce the price of gas through the magic of tachyon beams and unicorn farts or something. To call this crap a bunch of lies defames the noble art of lying by a politician – used to be they’d be more creative than this.
Sorry for the rant; you’ve already said all this much more eloquently than I could. I needed the catharsis though, so thank you for that. Blood pressure’s backed off a bit now…
OK. I have a plan for Peeing Jay and all other Big Oil haters.
1.) Let Big Oil find the oil where they can and at whatever it costs them.
2.) Let them sell it for what they can get for the oil.
3.) Regulate Big Oil any way you wish.
4.) Put all the taxes you can dream up on the final project.
5.) See whether Big Oil moves to Fiji and sells to the highest bidders world-wide.
If I were in Big Oil, I would not play games with any government that has its hands on my throat choking me. I would sell to China, Japan and every other thirsty country that is trying to support a basic economy. To Hell with the United States. Let the fabulous US government acquire it’s energy needs with it’s own government genius.
Liberal idiots are quick to tax windfall profits, but run the other way when the dry wells and downturns screw the producer. Every farmer knows about planting one for fox and two for crow. Every paneled library know-it-all has no concept of unpredictable business cycles.
Heliotrope, it’s all about that hate thing. The Democrats don’t see taxing the bejeezus out of oil companies as a component of a rational economic or energy policy; this is about the Democrat base that hates oil companies and wants them punished. Exactly like Peej says.
Ok, let’s cut a deal then. End these so-called tax subsidies in exchange for opening up every single oil field onshore and along the coast.
V the K,
When Peeing Jay comes by my survival shelter, he will have to talk to Mr. Shotgun or leave a calling card. And he had better skedaddle quickly, because Mr. Twenty Gauge is temperamental and short on attention span.
If that sounds peevish, it is because Mr. Double Barrel and I don’t suffer fools gladly.
I assume like Sen. Reid, TrollJ isn’t concerned about the constititutionality of the bill?
Boy, that Evil Clinton!!! (btw PJ that is who signed those tax codes (not subsidies, not “welfare”, not Tax Breaks, but Tax Codes) into law for corporations (not just oil, but all corps.) as a way to promote job growth and all the benefits of that to the economy. Giving Clinton what little credit he is due, as President with the Republicans he did sign lots of stuff that helped us…see al that bragging about balancing the budget and the jobless rates he then Bush engendered.
Put is this way PJ (the only lib I’ve seen actually try to defend this in any way one the forums/blogs I frequent btw) Food is getting higher priced…Lets change the Tax Code to raise Farmers taxes!! That’ll do wonders for the economy!
This is all a ploy by Dems to look like they are actually doing something to help us while not doing a damned thing or the opposite of what 90% or the populace (and likely way more than 90%) want and that is lower food and fuel prices (you know…the two things they no longer count toward inflation)
Or even simpler…Everyone calling themselves PeeJ is making too much so we are going to change the tax code so all those calling themselves PeeJ are “Going to Pay Their Fair Share”