Was it wrong for congress to roll back subsidies on Big Oil?

Question

The House voted to roll back billions of dollars in oil industry subsidies, completing the new Democratic majority's 100-hour legislative agenda. Democrats said the legislation could produce as much as $15 billion in revenue. Most of that money would pay to promote renewable fuels such as solar and wind power, alternative fuels including ethanol and biodiesel, and incentives for conservation.
Can one of you conservatives explain why is it a big deal to tax them when they are racking in massive profits?

Answer 1

In fact I believe that Oil companies should pay back to the people some of its massive profits they claim they need to build new refineries. SOOOOOOOOOO build the damn refineries already, or give the people back the money now.

Answer 2

Where do you think the $15 Billion in 'lost' revenues came from before this tax increase? You and me, from our taxes.

Where do you suppose the oil companies will go to get that extra $15 Billion they now will have to pay? You and me, from the gas pump.

Although the price of fuel is a major irritant, it is an necessary evil. I am generally against subsidies of any kind, but renewable energy sounds so good, doesn't it? All warm and fuzzy. Unfortunately, most liberal schemes are like Willie Wonka candies: there are unintended consequences.

Try running your car with solar power. Try shipping anything via truck or train with wind power.

Not gonna happen for decades, if ever.

Instead of fattening ivory tower researchers' wallets with little chance to produce anything of practical use, why not subsidize the expansion of public transportation alternatives?

Think simple. It's a '90's solution.


The late 1890's to be exact.


Bring back the electric streetcar. Link those suburbs with trolleys. Keep it simple - you are not building the TGV here, just simple trolleys linking the megalopolis together.


Make car ownership unnecessary.



Darth Serious

Answer 3

They had all of the oil CEO's in front of congress and they said they didn't care about the governement taking away these subsidies. American oil companies only control something like 10 ro 15 % of the known oil reserves now. But since Bush spent a trillion dollars of tax payer money to invade a country to set up bases and control that oil they will do okay. What do you think the oil deal that was crammed down the throats of the Iraqies does. It basically gaurntees a big profit for American oil companies.
No Mr. Taterhead has made sure that big oil is well taken care of.
But it might be that Mr. Taterheads plan backfired. The outcome is not yet known. Do you really think Bush cares about democracy in the middle east. He would be happy if every muslim in the world killed themselves as long as they leave the oil wells in tack.

Answer 4

It's a good thing -- if the oil companies are really that successful, they don't need any more of my money to help them with that. I hope the government returns the subsidies to the taxpayers; they won't, though. The surplus in the budget will be used to research new forms of energy development, and in forcing consumers to use the developments from that (however terrible they may be). I'd like my money back, please!

As long as we're at it, why should I have to give my tax money to ANY company -- yes, even the less fortunate ones? I say let them fend for themselves. I shouldn't have to pay to keep a sub-standard business afloat, the people who run the company should work to do that for themselves. If the company goes under, they can pick themselves up, dust themselves off, and try again -- hopefully having learned from the experience.

I don't hate the rich, and I don't pity the poor. I say let the market hash everything out, but do the best you can for your part.

Answer 5

when the govt didn't interfere much with oil industries, it was good. when the democrats pushed through the windfall profit tax and the capital gains taxes, we no longer had the cash reservers to explore for new energy sourses or to drill new wells-- thus making us (all of U.S.) more dependent upon sources of oil from unstable countries. We stacked our rigs and laid back. When bush repealed some of those taxes, we started drilling again. You liberal socialists smelled money and went straight for the jugular. You and the demoncrats have no right to take my money, that I worked hard to earn, to pour it down a sink hole. If wind or sun energy were profitable-- or if you would buy your own alternative energy-- it would be mass produced without democrates stealing from me. I have my own solar colectors and wind mills ,, do you? PUT YOUR OWN MONEY WHERE YOUR MOUTH IS! lying pathetic hippocrits pushing a nazzi socialist agenda in the name of a false conservativism

Answer 6

despite the fact which you compromise directly to evaluate this, you will no longer have the flexibility to apply the uncooked sort of $40-one thousand million money in earnings. If my ironmongery save shown that variety of earnings, i must be in super shape - yet for ExxonMobil, it quite represents approximately 8%,it incredibly is if truth be told no longer that lots. Apple and Microsoft are interior the 30% - 40% decision. basically out of activity, are you one among those people who think of the wealthy do no longer pay their straightforward proportion? i'm particular that in case you finally end up shown the form of techniques many biillions of money are paid in taxes by ability of the a million%, you're very rapid to declare, "Yeah, despite the fact that it incredibly is quite 15%! So by ability of industry standards, in words of bypass lower back on investment, they do no longer look to be the main rewarding corporation interior the international. they had be between the main important, yet that's a thoroughly diverse tale. i think of there are some motives for the subsidies and tax breaks - usually revolving around what they produce, no longer lots how lots they make producing it. Oil and gasoline are the life-blood of our economic device, and the economic device of the international - and the government makes a great deal additional money by ability of taxing the product then they might by ability of taxing the producer. The tax on gasoline is an super, sturdy sales bypass for Congress; they use this tax to fund all styles of beef initiatives to get votes. the greater desirable the companies produce, the greater desirable human beings purchase - the greater desirable human beings purchase, the greater desirable tax gets accrued. the factor is, inspite of the reality that, that the gasoline tax is a flat tax - you get charged sixteen cents (or inspite of the reality that it incredibly is) in accordance to gallon no count type what the value of a gallon is - that is incredibly not from now on a proportion. So from a Congressman's perspective, it makes complete adventure to permit the oil companies produce greater low-value gasoline by ability of giving them subsidies and tax breaks - they might sell it greater low-value to you - and that they regardless of the undeniable fact that get their sixteen or 18 cents in accordance to gallon.

Answer 7

Thats why the government has us, to labor and pay taxes. Do you think any of these big corporate companies pay tax. They figure they will make X amount of money selling X amount of oil products, then include the estimated tax they will pay the government. So the consumer pays the tax anyway. They pay nothing, but make plenty, it's the American way

Answer 8

Congress shouldn't subsidize anything. If it can't support itself on it's on profits and operations then it is an inferior product and should be left to die. Think of it as economic Darwinism. Though it's not like oil has to worry about being run out of business anytime soon.

Answer 9

Conservatives making $6/hr love to see Exxon CEO making $400 Millions a year

Answer 10

Who gets affected by the tax increases that are buried bill HR6? It is not a simple issue of trying to say these are tax breaks for some nebulous, super-rich oil executives. Here is what happens: The entire supply chain is affected. This does not hurt the large international global energy producers, the international oil companies. Who does it hurt? It hurts our wildcatters for natural gas, our small natural gas producers, our small oil producers, the investors. It hurts the supply chain of manufacturing and fabrication industry that supports the oil industry.
Outside of any refinery, one will find a very large base of welding, fabrication, machine tool operations, toolmaking, maintenance. Then we have around that circle there the provision of parts, the supply chain of manufacturers' representatives for components that come into the industry. And then who else is affected by that? It is the small business owner. It is the distributor of gasoline and oil and energy products. It is the parts manufacturer for vehicles. It is the convenience store operator who is affected by that.
And ultimately all of these people who I have mentioned so far in the chain are taxpayers. They are contributing to the public welfare and public infrastructure. Who is going to be lost when we lose those taxpayers because we eliminate those jobs by what seems to be a good thing on the surface but is very hurtful?
The small E and P companies, the exploration and production companies, those companies that are out there trying to find crude oil and natural gas, on average in 2005 spent 617 percent of their profits. In other words, for every dollar that they earned, they spent $6.17 reinvesting in the ground. And here is how they are able to do that: if you are a successful oil and gas finder, you find reserves in the ground that have a value. The value is based on the price and the length of time you expect it takes to get that crude oil and natural gas out of the ground; the lifting costs, depending on what that costs; lease operating expenses. All those expenses go into that, and they make a reasonably scientific guess as to the future value today of those reserves in the ground. Proved oil and gas reserves.
In other words, you take the life of that well, those cash flows. You discount that back to today's number, and that creates a value that in many instances these E and P companies go to the bank. They take the reserve report that shows that they have got a cash flow stream over the next 10 years, as an example, to their banker, and they say, Mr. Banker, we want to borrow against those reserves because we want to replicate what we have done. We want to put those dollars that we borrow from you back into the ground to find additional reserves for oil and gas or develop additional wells that are currently in the proved undeveloped category that they will continue to expand our reserve base, in other words, continue to expand the cash flow stream that we are going to earn as that oil and natural gas is produced over the next 30, 40 years, whatever the life of the well is, 10 years, 5 years, whatever the economic life of that well may be.
So this tax increase that this Congress passed last week, what that does is it reduces the cash flow, reduces the profits of all of these companies. And as you reduce those dollars, like in the small E and P company, if you reduce them a dollar, you have really cut expenditures in the oil business by $6. So for every dollar of taxes that are increased as a result of this action, we have eliminated $6 out of the reinvestment in the ground., because that money goes to all of these suppliers, goes to all these subcontractors, goes to all the folks who actually do the work and try to find this business.
Here is the twisted logic that our colleagues on the other side have used, I think one of the things we can all agree on is that we want to be less dependent on foreign sources of crude oil and natural gas, sources that we pay our good hard-earned money for. These are foreign sources. So all of us agree on that. The road forward or how we get that done is a multidecade journey.
While we are on this journey, it would make sense to me that the more domestic production we can produce, the more domestic barrels, the more domestic Mcf of natural gas that we produce means that that offsets or reduces in and of itself the crude oil and natural gas that we are importing. So the logic that our good colleagues used last week was if we can reduce the domestic supply of
crude oil and natural gas, then we have also reduced our dependency on foreign crude natural gas.
It would seem that we would want to promote the production of domestic supplies so that we could increase the domestic supply and therefore offset, in some small way, the need for foreign imports. Now, that does make sense. So a bill and a mechanics that reduces directly the domestic production seems awfully weird to me and a convoluted logic that I have been unable to kind of work my way through that.