It’s Time to End the Taxpayer Subsidies for Big Oil
Tomorrow, Congress has a real opportunity to do right by the American people. In response to President Obama’s repeated call to end the unwarranted tax breaks for big oil companies – which cost the American taxpayers billions of dollars each year – Congress will vote on a bill that could end these subsidies once and for all.
There are a lot of tough issues that come before Congress each year. This is not one of them. After all, these are tax breaks that oil companies don’t need and that we can’t afford. It should be a no brainer.
The United States has been subsidizing the oil industry for a century. President Obama believes that’s long enough. In fact, some of the oldest tax breaks for the oil companies date back to 1913 – a time when there were only 48 states in the Union and Ford was still producing the Model T.
After 100 years, there’s no reason for Congress to keep these subsidies on the books, especially right now. Today, as American families all across the country are feeling pain at the pump, the oil industry is posting record profits. In 2011 alone, the three largest American oil companies made a combined profit of more than $80 billion, or more than $200 million per day.
Now, we don’t begrudge companies for being successful in America. We want them to thrive and grow. But we also have to get our priorities straight. We have to invest in our future, not subsidize the past. Yet in the latest budget proposal by House Republicans, they want to keep the billions in tax breaks for oil companies in place while slashing discretionary investments in clean energy programs by nearly half. That just doesn’t make sense.
So the question that Congress needs to ask itself this week is simple: at a time when oil companies are making more money than ever before, how can we justify giving them billions more in taxpayer subsidies every year? And if Congress doesn’t vote to eliminate these tax breaks now, then when? How much bigger do oil company profits need to be? How many more years will the American people have to wait? This is a perfect example of an issue that makes Americans so cynical about Washington.
There’s little doubt that supporters of these subsidies will argue that ending tax breaks for oil companies will take away their incentive to produce oil. That claim is patently false – and it’s brought to you by the some of same people that like to offer up their easy, three point plans for $2 gas. As the former CEO of a major oil company said just last year, “in the face of sustained high oil prices it was not an issue – for the large companies – of needing the subsidies to lure us into looking and producing more oil.” In short, today’s oil prices alone provide more than enough incentive for the industry to produce more oil here at home. Last year, domestic oil production was at the highest level in nearly a decade.
As the President has said, it’s time to end the taxpayer giveaways to an industry that has never been more profitable, and double-down on a clean energy industry that never has been more promising. We look forward to this vote and hope that Congress chooses to do what’s right and finally end these subsidies. At the very least, this vote will put every single member of Congress on the record. They can either stand up for oil companies, or they can stand up for the American people.