Dems take on "big oil"

[Snoopis]

Dems Take Aim at Oil Company Tax Breaks

By H. JOSEF HEBERT
Associated Press Writer
AP Photo/DENNIS COOK
U.S. Video




WASHINGTON (AP) -- House Democrats are targeting billions of dollars in oil company tax breaks for quick repeal next year. A broader energy proposal that would boost alternative energy sources and conservation is expected to be put off until later.

Hot-button issues such as a tax on the oil industry's windfall profits or sharp increases in automobile fuel economy probably will not gain much ground given the narrow Democratic majorities in the House and Senate.

Incoming House Speaker Nancy Pelosi, in an outline of priorities over the first 100 hours of the next Congress in January, promises to begin a move toward greater energy independence "by rolling back the multibillion dollar subsidies for Big Oil."

Yet the energy plan being assembled by Pelosi's aides for the initial round of legislation is less ambitious than her pronouncement might suggest.




For the most part, the tax benefits are ones that lawmakers talked of repealing this year when Congress struggled to respond to the public outcry over soaring summer fuel prices and oil companies' huge profits.

Topping the list for repeal are:

-Tax breaks for refinery expansion and for geological studies to help oil exploration.

-A measure passed two years ago primarily to promote domestic manufacturing. It allows oil companies to take a tax credit if they chose to drill in this country instead of going abroad.


Democrats say neither tax benefit should be needed for an industry reaping large profits at today's high crude oil prices.

Over 10 years, the production tax credit saves oil companies $5 billion and the refinery measure and exploration credit a total of about $1.4 billion, according to Congressional Budget Office estimates.

Other oil tax breaks probably will go unchallenged. That includes some passed by Congress only a year ago and others already targeted for repeal this year.

For example, House Democrats have no plans to change a provision that allows oil companies to avoid billions of dollars in taxes by the way they calculate inventories. The Senate this year agreed to a repeal; the effort was abandoned amid House GOP opposition and an uproar from other industries that also benefit from the tax language.

House Democrats also are shying away from tampering with more than $1 billion worth of oil- and gas-related tax breaks, enacted last year. These breaks largely benefit small companies or gas utilities rather than the major oil companies now awash in cash.

Nevertheless, the House and Senate are expected to push legislation early to force oil companies to renegotiate flawed offshore drilling leases that have allowed the companies to avoid paying federal royalties. The loss eventually could cost the government $10 billion, according to some congressional estimates.

Other prime targets of House and Senate Democrats include:

-Alleged price gouging. Proposals to create a federal price gouging law for gasoline and other fuels probably will move quickly.

-More incentives and mandates to expand the use of ethanol and biodiesel as a substitute for gasoline. Requiring oil companies to phase in retail pumps that deliver fuel that is 85 percent ethanol.

-Requiring power companies to produce a percentage of their electricity from renewable energy sources such as wind and solar power. Such a measure is a priority of Sen. Jeff Bingaman, D-N.M., incoming chairman of the Senate Energy and Natural Resources Committee.

-Extending energy efficiency tax credits approved by Congress last year. Most are scheduled to expire at the end of next year.

-Expanding a tax break for buyers of gas-electric hybrid cars and offering more incentives for automakers to build greater numbers of the vehicles.

Rep. John Dingell, D-Mich., who will take over as chairman of the House Energy and Commerce Committee, said he plans hearings on legislation to spur further production and distribution of ethanol and biodiesel, and promote conservation.

But he suggested it will take time to produce legislation. "The process is a long one. It takes hearings, it takes fact finding," said Dingell in a telephone interview.

On the Senate side, Bingaman probably will avoid writing a single broad energy bill, preferring to push through specific legislation. Among Bingaman's other goals are new incentives to spur renewable energy development and more tax breaks for conservation.

Last spring, Sen. Charles Schumer, D-N.Y., said if the country is to reduce its addiction to oil and high energy prices it needs a "crash program" to develop more alternative energy sources, dramatically increase conservation and examine "whether or not we should break up the big oil companies."

Next year, Schumer assumes the No. 3 leadership position among Senate Democrats and will be one of the party's top strategists.

© 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.

So they are going to drive up gas prices. Good thing we got those pesky Republicans out of control!

[Diesel66]

Even if the tax breaks are useless, they are nothing compared to the 23 billion in federal income taxes that Exxon paid last year.

[Dr.Strange]

Good article.

For example, House Democrats have no plans to change a provision that allows oil companies to avoid billions of dollars in taxes by the way they calculate inventories. The Senate this year agreed to a repeal; the effort was abandoned amid House GOP opposition and an uproar from other industries that also benefit from the tax language

[Snoopis]

Raven from arfcom summed it up pretty well:

This is the stupid bull**** you get when Democrats win. High oil prices? Terrorists getting rich from this situation? Democrats have the answer: attack American oil companies, raise the price of oil, halt domestic development, and kill lots of high-paying jobs.

[xer0xed]

Great, and they'll probably use the revenue for corporate welfare. Oh the irony. ;P

[user437490845hjgd]

Enviro-socialist synergetic effect. Artificially increase the price of oil (through taxes), reduce demand (a downward shift of the demand curve), reduce consumption, reduce (US) emissions. Enviros are happy.

Part two, more tax dollars to fund nanny-state government programs, and artificially prop up technologies and research directions the market has no interest in (subsidize failure). This will in turn depress real innovation (by insulating research groups from market pressure), which will harm economic growth and slow the introduction of novel energy solutions, leading to less rapid depletion of other resources (by the US).

A byproduct will be prolonged US reliance on oil, including foreign oil; the reduction in US demand for foreign oil will just allow economic competitors (India, China, etc) to purchase their oil at a lower price, which will lead to a mirror-image increase in their consumption (thus no net decrease in emissions, or in net worldwide resource depletion).

Net result: "hey US economy - go fuck yourself! At least we feel all warm and fuzzy!"

[Dr.Strange]

Originally Posted by types_with_fist

Enviro-socialist synergetic effect. Artificially increase the price of oil (through taxes), reduce demand (a downward shift of the demand curve), reduce consumption, reduce (US) emissions. Enviros are happy.

Part two, more tax dollars to fund nanny-state government programs, and artificially prop up technologies and research directions the market has no interest in (subsidize failure). This will in turn depress real innovation (by insulating research groups from market pressure), which will harm economic growth and slow the introduction of novel energy solutions, leading to less rapid depletion of other resources (by the US).

A byproduct will be prolonged US reliance on oil, including foreign oil; the reduction in US demand for foreign oil will just allow economic competitors (India, China, etc) to purchase their oil at a lower price, which will lead to a mirror-image increase in their consumption (thus no net decrease in emissions, or in net worldwide resource depletion).

Net result: "hey US economy - go fuck yourself! At least we feel all warm and fuzzy!"

Wow, great post! Good explaination of what will happen.

[drjjg]

LOL, you right wingers are funny.

First of all, taxes aren't going to be increased, tax breaks(with time limits) won't be renewed. The economy did just fine prior to them. In fact, I recall that the the debt was actually beginning to decrease toward the end of clinton administration, which SAVES tax payers money.

Second of all, the US government is STILL running a deficit and racking up debt. It will go to offsetting the fiscal irresponsibility of the GOP. The interest payment is now ~425billion per year on the US federal debt. You advocate continued deficit spending? LMAO. Something has to be done. Would you rather that the US government take money out of YOUR pocket, or out of the pockets of a few companies raking in BILLIONS per year? Hmmm, tough one there....

[Snoopis]

Originally Posted by types_with_fist

Net result: "hey US economy - go fuck yourself! At least we feel all warm and fuzzy!"

And it's not just the economy, it's national security. Further, I was just reading that Charles Rangel is trying to reinstate the draft as well. Which would make sense now that the Dems are getting us out of Iraq. Oh wait...

[Snoopis]

Originally Posted by drjjg

LOL, you right wingers are funny.

First of all, taxes aren't going to be increased, tax breaks(with time limits) won't be renewed. The economy did just fine prior to them. In fact, I recall that the the debt was actually beginning to decrease toward the end of clinton administration, which SAVES tax payers money.

Second of all, the US government is STILL running a deficit and racking up debt. It will go to offsetting the fiscal irresponsibility of the GOP. The interest payment is now ~425billion per year on the US federal debt. You advocate continued deficit spending? LMAO. Something has to be done. Would you rather that the US government take money out of YOUR pocket, or out of the pockets of a few companies raking in BILLIONS per year? Hmmm, tough one there....

Yeah, like the oil companies will just suck it up. Businesses don't pay taxes. Period. We pay them. And now we're gonna pay more of them. In the price of our gasoline.

[ElMariachi]

Originally Posted by types_with_fist

Enviro-socialist synergetic effect. Artificially increase the price of oil (through taxes), reduce demand (a downward shift of the demand curve), reduce consumption, reduce (US) emissions. Enviros are happy.

Part two, more tax dollars to fund nanny-state government programs, and artificially prop up technologies and research directions the market has no interest in (subsidize failure). This will in turn depress real innovation (by insulating research groups from market pressure), which will harm economic growth and slow the introduction of novel energy solutions, leading to less rapid depletion of other resources (by the US).

A byproduct will be prolonged US reliance on oil, including foreign oil; the reduction in US demand for foreign oil will just allow economic competitors (India, China, etc) to purchase their oil at a lower price, which will lead to a mirror-image increase in their consumption (thus no net decrease in emissions, or in net worldwide resource depletion).

Net result: "hey US economy - go fuck yourself! At least we feel all warm and fuzzy!"

Pretty much. Most environmentalists are economically-retarded. Instead of looking for real solutions that will cause a great benefit, they look for useless, socialist Band-Aids like Kyoto, that make people feel warm and fuzzy, but do absolutely jacks$%t to help the environment, and ultimately end up killing economic progress and throwing even more people into poverty.


Another example of using emotions instead of basic logic.

[ElMariachi]

Originally Posted by drjjg

LOL, you right wingers are funny.

First of all, taxes aren't going to be increased, tax breaks(with time limits) won't be renewed. The economy did just fine prior to them. In fact, I recall that the the debt was actually beginning to decrease toward the end of clinton administration, which SAVES tax payers money.

Second of all, the US government is STILL running a deficit and racking up debt. It will go to offsetting the fiscal irresponsibility of the GOP. The interest payment is now ~425billion per year on the US federal debt. You advocate continued deficit spending? LMAO. Something has to be done. Would you rather that the US government take money out of YOUR pocket, or out of the pockets of a few companies raking in BILLIONS per year? Hmmm, tough one there....

Some of you left wingers are mentally challenged. If the tax cuts go, the oil companies will simply raise their prices, will charge more, due to the increased "cost of business." That is it. The only ones who will be screwed, is the same people who are usually screwed when the Democrats are in charge.....the middle class. The money that these companies lose, will simply be regained due to higher costs charged to consumers.

[user437490845hjgd]

Originally Posted by Snoopis

Yeah, like the oil companies will just suck it up. Businesses don't pay taxes. Period. We pay them. And now we're gonna pay more of them. In the price of our gasoline.

Yup. Taxes are, at best (ie if flat) price-differential neutral. An across the board increase in operating costs is a direct across the board increase in consumer prices. If they all get nailed with a business cost increase, there is no market incentive to absorb that cost difference by reducing profits and maintaining prices - the price difference is going to be picked up by the consumer, 100%. And demand will fall accordingly, which *itself* will reduce profits (so all you corporation haters can still celebrate!). The only people being helped are folks in India and China. This is not complicated.

[xer0xed]

Originally Posted by Snoopis

Yeah, like the oil companies will just suck it up. Businesses don't pay taxes. Period. We pay them. And now we're gonna pay more of them. In the price of our gasoline.

Bingo. This is punishing the consumer for no reason basically. It's not surprising, though, living in a country where about 1/3 of your newly claimed private property is stolen by the government and thrown to robber barons and nanny-state government control schemes.

[ElMariachi]

Originally Posted by xer0xed

Bingo. This is punishing the consumer for no reason basically. It's not surprising, though, living in a country where about 1/3 of your newly claimed private property is stolen by the government and thrown to robber barons and nanny-state government control schemes.

What is kind of scary is how many people are THAT stupid, THAT clueless, to fall for this nonsense. This "feel-good" legislation that accomplishes nothing, solves nothing, but makes it look like something is being done. Kind of like getting all dressed up to go hunting, but then only bringing blanks for rounds. It may look impressive, but is absolutely ineffective.

[Dr.Strange]

Originally Posted by types_with_fist

Yup. Taxes are, at best (ie if flat) price-differential neutral. An across the board increase in operating costs is a direct across the board increase in consumer prices. If they all get nailed with a business cost increase, there is no market incentive to absorb that cost difference by reducing profits and maintaining prices - the price difference is going to be picked up by the consumer, 100%. And demand will fall accordingly, which *itself* will reduce profits (so all you corporation haters can still celebrate!). The only people being helped are folks in India and China. This is not complicated.

Ever heard of Forbes? This guy is pretty damn bright in my opinon and he strong advocater of this. (flat tax)

[drjjg]

Originally Posted by types_with_fist

If they all get nailed with a business cost increase, there is no market incentive to absorb that cost difference by reducing profits and maintaining prices

Total BS. No market incentive? By eliminating the deficit and ultimately reducing and eliminating the federal debt, nearly half a trillion dollars per year can be saved. As a result over the long term, taxes can be REDUCED. Not only for individuals, but for businesses. However, businesses are only concerned with short term profit, and not long term economic stability and growth.
Continue going further into debt and paying more and more interest on the debt. Yeah.. that's a formula for low taxes.....

[xer0xed]

Originally Posted by drjjg

Total BS. No market incentive? By eliminating the deficit and ultimately reducing and eliminating the federal debt, nearly half a trillion dollars per year can be saved. As a result over the long term, taxes can be REDUCED. Not only for individuals, but for businesses. However, businesses are only concerned with short term profit, and not long term economic stability and growth.
Continue going further into debt and paying more and more interest on the debt. Yeah.. that's a formula for low taxes.....

The solution is to cut programs and not raise taxes on anything. As you know, taxes at the federal level only benefit the oligarchs.

[ElMariachi]

Originally Posted by drjjg

Total BS. No market incentive? By eliminating the deficit and ultimately reducing and eliminating the federal debt, nearly half a trillion dollars per year can be saved. As a result over the long term, taxes can be REDUCED. Not only for individuals, but for businesses. However, businesses are only concerned with short term profit, and not long term economic stability and growth.
Continue going further into debt and paying more and more interest on the debt. Yeah.. that's a formula for low taxes.....

Um...BS. Tax revenues are higher now than they were before the tax cuts. Why is that? Because when you give people tax breaks, they are more likely to spend, more likely to invest, thus money is moved around, and a much larger group of people overall stands to profit.

Taxes do not need to be raised to curb the deficit. The GDP of this country has become so ridiculous that the deficit has not realistically gotten that much worse, but socialist-type spending has. Instead of these extravagant government programs, there needs to be a more concentrated effort at fixing things like education and healthcare, without just stealing money from taxpayers and then throwing that money away into a bottomless pit of bureaucracy and red tape.

[Dr.Strange]

Originally Posted by drjjg

Total BS. No market incentive? By eliminating the deficit and ultimately reducing and eliminating the federal debt, nearly half a trillion dollars per year can be saved. As a result over the long term, taxes can be REDUCED. Not only for individuals, but for businesses. However, businesses are only concerned with short term profit, and not long term economic stability and growth.
Continue going further into debt and paying more and more interest on the debt. Yeah.. that's a formula for low taxes.....

Your post makes no sense. Do you understand supply and demand curves and how they are effected eh?

[user437490845hjgd]

Originally Posted by drjjg

Total BS. No market incentive? By eliminating the deficit and ultimately reducing and eliminating the federal debt, nearly half a trillion dollars per year can be saved. As a result over the long term, taxes can be REDUCED. Not only for individuals, but for businesses. However, businesses are only concerned with short term profit, and not long term economic stability and growth.
Continue going further into debt and paying more and more interest on the debt. Yeah.. that's a formula for low taxes.....

Cut spending and get the best of both worlds.

[drjjg]

Originally Posted by Dr.Strange

Your post makes no sense.

If you don't understand how the deficit(accruing debt) and the debt itself incurs interest payments footed by individuals and businesses, maybe you should learn some basic math and/or accounting skills.

[drjjg]

Originally Posted by types_with_fist

Cut spending and get the best of both worlds.

Cut spending on what exactly?

[Dr.Strange]

Originally Posted by drjjg

If you don't understand how the deficit(accruing debt) and the debt itself incurs interest payments footed by individuals and businesses, maybe you should learn some basic math and/or accounting skills.

Maybe you should learn some basic economic skills. We need to cut government spending and not raise taxes.

[LuckyDragon]

Howabout keep your government hands off the damn business community. Its not the governments money, its money the government takes from the people. Hopefully the Democrats are not going undertake this "grand experiment" with Centralized Price Controls ala Socialist countries. The democrats seem to view Businesses and gun owners like snakes to be trod open until money comes out.


The first news wire from Hong Kong when it looked like Democrats would win in the Senates is that Foreign holdings in the United States were dropping for the first time in months. Economists have now predicted a general economic slowdown.

[user437490845hjgd]

Originally Posted by drjjg

Cut spending on what exactly?

http://www.federalbudget.com/chart.gif

Unconstitutional (Tenth Amendment to the United States Constitution) federal spending (ideally this spending would not exist; realistically it can be slashed slowly) - including social security, health and human services, DoA, and SSA especially, with the bulk of any surplus going towards the debt until the GDP to debt ratio (http://www.moneyweek.com/uploaded/im...bt-and-GDP.gif) falls to 10%, followed by a round of tax cuts across the board and balanced budgets.

[drjjg]

Originally Posted by types_with_fist

http://www.federalbudget.com/chart.gif

Unconstitutional (Tenth Amendment to the United States Constitution) federal spending (ideally this spending would not exist; realistically it can be slashed slowly) - including social security, health and human services, DoA, and SSA especially, with the bulk of any surplus going towards the debt until the GDP to debt ratio (http://www.moneyweek.com/uploaded/im...bt-and-GDP.gif) falls to 10%, followed by a round of tax cuts across the board and balanced budgets.

I'm curious:

1)Why didn't you advocate cutting defence spending?
2) By referring to the 10th amendment, I must presume you believe those matters to be up to the states?

[ElMariachi]

Originally Posted by drjjg

I'm curious:

1)Why didn't you advocate cutting defence spending?
2) By referring to the 10th amendment, I must presume you believe those matters to be up to the states?

Because providing for the defense of its citizens is a basic function of government. The government has NO such requirements to provide for some of this other nonsense. The minimum wage in itself has become a joke, we're moving away from a minimum wage to a so-called right to a "living wage" for uneducated people. Government should have a minimal role at best. Provide for the security of its citizens, uphold the laws, maintain diplomacy, but stay out of the lives of its citizens as much as possible.

[drjjg]

Originally Posted by ElMariachi

Because providing for the defense of its citizens is a basic function of government. The government has NO such requirements to provide for some of this other nonsense. The minimum wage in itself has become a joke, we're moving away from a minimum wage to a so-called right to a "living wage" for uneducated people. Government should have a minimal role at best. Provide for the security of its citizens, uphold the laws, maintain diplomacy, but stay out of the lives of its citizens as much as possible.

I didn't imply abolishing defence spending, lol. I said CUT defence spending. Even at half the current rate, it'd still be the most well financed and powerful military in the world(and tax payers would save $200+ billion).

And, as I've said in previous posts, the nuclear arsenal alone would deter any nation or group of nations from attacking the US and it 'only' costs about 35billion a year to maintain. Another $70billion or so for a relatively modest army/navy/airforce and you'd save over 300billion.
I just find it funny that so-called 'fiscal conservatives' complete overlook such a huge expenditure. Seems a little too convienient and ideologically inconsitent.

[user437490845hjgd]

Originally Posted by drjjg

I'm curious:

1)Why didn't you advocate cutting defence spending?
2) By referring to the 10th amendment, I must presume you believe those matters to be up to the states?

2) All matters not EXPRESSLY enumerated by Article One, Section 8 of the US Constitution (Powers of Congress) are implicitly (in the sense of Madison), and explicitly by the 10th amendment, intended to be functions of the states. Even the 16th amendment does not "cancel" this. There is a broad interpretation that allows the federal government to take on any and all tasks, rendering VALUELESS A1S8 and 10A. "We hereby interpret A1S8 and 10A to have no meaning" is basically our current state of affairs. Freedom of movement between individual States itself is supposed to be an intrinsic check, in turn, on State power and taxation. The US Constitution was very well thought out.

1) Defense spending is specifically enumerated by A1S8 (thus is a legitimate federal function), and, as a ratio to GDP, is historically almost at its lowest point. This statement is meant to say nothing about the value or Constitutionality of certain (*cough cough*) wars.