Oil Companies Are Raking In The Profits — And Tax Subsidies

The big 3 oil companies have reported a combined profit of $44 billion for 2012. The New York Times reported that these earnings have actually dropped based on stated expectations earlier this year. They are attributing it to the lower gas prices. They also note that the top five oil companies receive a total of $2.4 billion in tax breaks each year. 

According to Republicans, in order to balance our budget, they want to cut tax credits and programs that benefit the middle class, i.e., education funding for Pell Grants and public universities, tax credits like the earned income tax credit and mortgage deductions, Meals on Wheels and food subsidies for low-income families, but they absolutely refuse to end these oil and gas industry subsidies.  

The Center for American Progress Action has analyzed Romney’s tax plan and it would actually lower the top five oil and gas companies yearly tax rates by another $2.3 billion. They say this would double what they already receive in tax breaks. 

Think Progress wrote on this subject and they actually listed some of the ways these oil companies are spending their money. 

ExxonMobil:  

– Exxon spent 42 percent — or $10.7 billion — of its 2012 profits buying back its stock, which enriches executives and largest shareholders. 

– Exxon has spent $17 million lobbying for the past 18 months, making it the top spender in the oil and gas industry. It has spent more than $52 million lobbying for the first three years of the Obama presidency, 50 percent more than in the Bush administration. 

– Exxon is sitting on $18 billion in cash reserves. 

– Exxon send federal candidates $1.3 million in campaign contributions so far this campaign cycle, sending 91 percent to Republicans. 

– Exxon paid just 13 percent in federal taxes last year, lower than the average American family. Right after Mitt Romney, Senate Minority Leader Mitch McConnell (R-KY) is the top recipient of Exxon federal contributions. 

– Exxon CEO Rex Tillerson received $24.7 million total compensation.

Royal Dutch Shell: 

– Shell will start drilling in the Arctic this summer, but its oil spill response plan is still behind schedule. It’s off to an inauspicious start in the Arctic, recently losing control of an Arctic drilling rig. 

– Shell has spent nearly $22 million for the past 18 months, making it the second-biggest spender of the oil and gas industry. 

– Shell has more than $17.3 billion in cash reserves. 

– Shell bought back 15 percent of its second-quarter profits, or $900 million. 

– Shell CEO Peter Voser’s compensation more than doubled in 2011 to $15.3 million. His salary increased (in euros) by 113 percent. 

– In its annual report, Shell noted that the number of oil spills increased from 195 in 2010 to 207 during 2011.

Republican Tax-Cutting Track Record

I’m not a fan of taxes like everyone else, but if you like things like roads and bridges, schools and teachers, police and firefighters, etc, then you know they are a necessity. Our country cannot survive without them. We already see the effects of slash and cut politics all over the country at local and state levels. 

In order to grow our economy, everyone needs to pay, and right now not everyone is. The wealthy and corporations are seeing the lowest tax rates in 50 years. GOP’s record on their push for maintaining tax cuts, tax subsidies (corporate welfare), and their triple down economics theory has been proven not to work over and over and over. 

In 1982, conservative Republicans said Reagan’s tax increases would cause a disaster (they didn’t).  

In 1993, conservative Republicans said Clinton’s tax increases would invariably fail (they didn’t). 

In 2009, conservative Republicans said Obama’s stimulus would make the economy worse (it didn’t). 

And in 2001, conservative Republicans said Bush’s tax cuts would cause a remarkable economic boom (they didn’t). 

In 2003, these same conservative Republicans said more Bush tax cuts would do the trick (they didn’t).  

In 2010, these same conservative Republicans said if we could just keep those Bush tax cuts around a little more, we’d be amazed at the economic turnaround in 2011. Here we are. I don’t think anyone’s amazed. 

Ezra Klein wrote the other day “that the Republican approach to tax policy is no longer based on any recognizable economic theory.” America, over the past 2-1/2 years, have been held hostage by radical Republicans at every step of the way.

It is way past time to call their bluff since it is all too apparent they have no intention of doing anything to help out the 99% of us that are not mega-wealthy or a corporation/industry.

Boehner Won’t End Oil Subsidies

There are Democrats who are wanting to end billions in subsidies to oil companies. Since they have posted record profits and are considered the most profitable industry on earth, it would sound like a great idea to fix our budget problems, however, Boehner does not want to end these subsidies.

Instead he wants to drill for oil and increase production. This makes no sense because any oil we drill for would automatically go on the world market.

The only benefit it would have is to create jobs and increase the chance of another oil spill. Steve Hargreaves wrote:

The problem is this: While increased oil and gas drilling in the United States may create good-paying jobs, reduce reliance on foreign oil and lower the trade deficit, it will have hardly any impact on gas and oil prices. That’s because the amount of extra oil that could be produced from more drilling in this country is tiny compared to what the world consumes. Plus, any extra oil the country did produce would likely be quickly offset by a cut in OPEC production.

“This drill drill drill thing is tired,” said Tom Kloza, chief oil analyst at the Oil Price Information Service, which calculates gas prices for the motorist organization AAA. “It’s a simplistic way of looking for a solution that doesn’t exist.”

Since the oil companies are listed as the top 6 richest industries in the world, I think they should pay more, but since they own our representatives, particularly Republicans, it is very unlikely they will end these subsidies unless we force them to.