In the past few weeks Republicans have made what I think are 2 major votes that directly point to what their priorities are. One was the unanimous vote by GOP to keep $40 billion in tax subsidies for big oil and the other was to end Medicare as we know it. When I look at these 2 bills together, it is striking to me that the GOP did not have any reservation in their choices to pass and/or block these bills.
The fact that on one hand they say Medicare is unsustainable, therefore, it must end, and then on the other hand giving such huge tax break to big oil, keeping in mind their recent profits have been record-breaking and the top 5 oil companies are now ranked as the most profitable companies IN THE WORLD, it is an absolute insult to me and should be for every American, conservative or liberal.
One thing that has not been talking about much is what are the effects of these tax breaks on the clean-energy and renewable-energy companies. These up and coming companies are put at a disadvantage because they can’t compete at the same level as big oil.
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 rig explosion. Then there’s Section 199, which allows profitable oil and gas companies to deduct 6% of net income.
If Republicans really wanted to support capitalism, they would end the socialization of these companies and create an environment for companies that truly promote competition and innovation.
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 (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.