House Votes to Rescind Oil Drillers’ Tax Breaks

[jfuh]

Good, why were we giving them tax breaks to begin with, it's not as if they were having trouble.
Let the free market work. If you can't compete you shouldn't be in business.

House Democrats easily passed legislation on Thursday that would rescind $14 billion in tax breaks and subsidies for oil drillers and reserve the money to develop alternative energy projects and conservation technologies. The measure passed 264 to 163, with many Republicans joining a bloc of Democrats. Passage came despite opposition from the oil industry and the Bush administration, which said the bill singled out the companies for higher taxes and could increase the country’s dependence on foreign oil.
The bill will rescind $7.6 billion in tax breaks for oil drillers that Congress passed in 2004 and 2005 and will add $6.3 billion in royalties from companies that pump oil and gas in publicly owned waters of the Gulf of Mexico and off Alaska.

Why should one industry be able to escape taxation as well as royalties while other industries aren't? for that matter, last I checked, the oil industry has never had any trouble making ends meet.
Some interesting quotes

“Big Oil is hitting the taxpayer not once, not twice, but three times,” Representative Nick J. Rahall II, Democrat of West Virginia and chairman of the House Natural Resources Committee, said. “They are hitting them at the pump. They are hitting them at the Treasury through the tax code. And they are hitting them with royalty holidays.”

Do tell more


[quote[Many Republicans complained that the bill would lead to higher gasoline prices by penalizing domestic production and create a “slush fund” for alternative energy projects.[/QUOTE] A slush fund for alternative energy would be bad because?? Gasoline is going to rise either way, especially come election when the oil industry wants to manipulate the way ppl vote.

“The San Francisco Democrats want to run the cars on the road with wind,” said Representative Steve Pearce, Republican of New Mexico.

:lamo, if only Mr. Pearce.

 

[Kandahar]

Good, why were we giving them tax breaks to begin with, it's not as if they were having trouble.
Let the free market work. If you can't compete you shouldn't be in business.

Actually, let's tax them MORE than other businesses. The public has to pay to clean up the pollution from their products, and foots the bill for our military adventures in the Middle East caused by their products. The oil industry isn't functionally equivalent to the widget industry. It has direct ramifications on our national security.

Taxing oil companies directly might be an easier pill for the American people to swallow than an oil consumption tax, even though they would be very similar in functionality.

 

[danarhea]

Good, why were we giving them tax breaks to begin with, it's not as if they were having trouble.
Let the free market work. If you can't compete you shouldn't be in business.
Why should one industry be able to escape taxation as well as royalties while other industries aren't? for that matter, last I checked, the oil industry has never had any trouble making ends meet.
Some interesting quotes
Do tell more

Many Republicans complained that the bill would lead to higher gasoline prices by penalizing domestic production and create a “slush fund” for alternative energy projects.

A slush fund for alternative energy would be bad because?? Gasoline is going to rise either way, especially come election when the oil industry wants to manipulate the way ppl vote.



:lamo, if only Mr. Pearce.

Although Bush has gone overboard by balancing the oil company tax breaks on the backs of working people, some tax breaks ARE needed. This would give oil companies the incentive to explore more. Don't forget that if you don't make a buck then you don't try your luck. Damn I'm a poet and don't noet. LOL.

However, the entire tax system is screwed up, and IMHO, the best solution is to dismantle the IRS completely, and put a national sales tax in its place. Instead of the IRS, you would have a Comptroller of National Accounts, which would see that sales taxes are collected from the businesses who collect them from the consumer.

At first blush, many might complain that this is not fair to low or middle income families, but after this explanation, you will see that it is more than fair. Why? Because the following items would be exempt:

1) Food

2) Medicine and health care

3) Rent or mortgage payments

4) Education

5) Insurance payments

6) For business, raw materials used to make a product. After all, if you tax the raw materials AND tax the product, then that would amount to double taxation.

7) Services, which consist of labor and not materials. For example, here in Texas, if you pay to have A/C work done, you pay taxes on the parts but not on the labor (that is for residential, not commercial). Under the new plan, whether the labor for any services should be charged for business or not can be debated. I am on the fence on that one, and could be persuaded either way with a good argument. Another service is the work of an attorney, CPA, tax preparer (which would be out of business under the new tax structure), or other professional. There would be no tax.

Everything else would be taxable. If I missed anything which should be tax exempt, feel free to bring that up for discussion. For the really poor, say, under $15,000.00 per household (admittedly an arbitrary number at this point), they could apply for a sales tax exemption, and would have to show their certificate when they purchase a TV, furniture, or other household item. Those who commit fraud under this provision (possessing or using a fake certificate) would be committing a felony, with some serious prison time in store for them.

Many millionaires today pay no taxes whatsoever due to loopholes. Under the proposed National Sales Tax, there would be NO loopholes whatsoever. Everyone would pay the national tax on what they purchase. If a rich man wants to buy a boat, a Ferrari, or a race horse, he pays the tax. If a corporation wants to buy computers or copiers, they pay the tax. No tax on essentials or raw materials, but anything above that, everyone would end up paying his or her fair share.

This would be a much more equitable tax structure than exists at the present time.

 

[Stinger]

Hmmmmmm

We want more energy independence so what do we do, discourage domestic drilling and refining.

Great plan Dems.

 

[Kandahar]

Hmmmmmm

We want more energy independence so what do we do, discourage domestic drilling and refining.

Great plan Democrats.

Actually it is. There's probably not enough unexplored oil in the United States to significantly change the price of a barrel of oil. And whether we actually buy it from Alaska or Iran is irrelevant, because oil is a fungible commodity.

I don't have any problem with more domestic drilling/refining if the local communities are willing to tolerate it, but it's certainly not the answer to our energy problems.

The best way to promote energy independence is to make people pay for the pollution and terrorism they cause by buying oil in the first place.

 

[jfuh]

Hmmmmmm

We want more energy independence so what do we do, discourage domestic drilling and refining.

Great plan Democrats.

For a praiser of the free market in the past, what has happened? did you forget that US oil production prices are still put onto the global market and then balanced?
So no, it would not make much difference at all to what we as citizens pay at the pump whether the oil be from the me or it be from some where in Alaska, unless that is there is just so much oil under the US crust. However there simply is not enough to offset that produced in the ME, Venezuela, Russian, Canada and elsewhere. Hence your entire argument is based on the age old fear tactic used by the GOP to support these tax breaks for their oil bosses.

 

[jujuman13]

Every single one of you who has posted so far on this thread, has totally ignored what the thread actually is.
I believe that it is wrong to rescind Tax breaks on Oil Drillers, why?
Exploration and discovery of new field means that we are able to(albeit, however slightly) reduce our dependance on foreign oil.
It means that our reserves may rise.
Oil drilling is at the best of times an iffy process, drillers need those Tax breaks even if only to encourage them to continue to seek this precious resource.

As regards those who posted that the extra money saved, could well be put forward for educational purposes, I concur as the spelling of some of your responses is, indeed for a supposedly civilised nation, quite atrocious.

 

[Iriemon]

Every single one of you who has posted so far on this thread, has totally ignored what the thread actually is.
I believe that it is wrong to rescind Tax breaks on Oil Drillers, why?
Exploration and discovery of new field means that we are able to(albeit, however slightly) reduce our dependance on foreign oil.
It means that our reserves may rise.
Oil drilling is at the best of times an iffy process, drillers need those Tax breaks even if only to encourage them to continue to seek this precious resource.

As regards those who posted that the extra money saved, could well be put forward for educational purposes, I concur as the spelling of some of your responses is, indeed for a supposedly civilised nation, quite atrocious.

I'm not sure why tax breaks are necessary or even wise for this. I am not that familiary with the specifics of the tax breaks, but the presumed effect is that their expenses are reduced, and their profits increased. Then you'd have to assume that the oil companies will take at least some of that extra govt subsidized profit and spend it on greater exploration. I'm not sure if it is reasonable to assume that this would be done with most of the excess profits. The rest just makes their shareholdres and executives richer at that taxpayer's expense.

Second, if the market based on price doesn't produce enough incentive to drill for oil, why should we encourage it further? The US has a finite amount of this precious resource. Why should we provide extra profits to companies to find and use up *our* limited amount of this resource? For what, a little lower price on the pump, which will only encourage people to continue to buy gas guzzlers? Aren't we better off using up other companies reserves, and conserving what we have left for future need?

 

[jfuh]

Every single one of you who has posted so far on this thread, has totally ignored what the thread actually is.
I believe that it is wrong to rescind Tax breaks on Oil Drillers, why?
Exploration and discovery of new field means that we are able to(albeit, however slightly) reduce our dependance on foreign oil.
It means that our reserves may rise.
Oil drilling is at the best of times an iffy process, drillers need those Tax breaks even if only to encourage them to continue to seek this precious resource.

As regards those who posted that the extra money saved, could well be put forward for educational purposes, I concur as the spelling of some of your responses is, indeed for a supposedly civilised nation, quite atrocious.

The only benefit of such tax breaks are reserved to the companies themselves. It would be naive to think that drilling locally would ever be able to alleviate our dependence on foreign oil, in particular that of the middle east. Our demand is simply far too high. The only way we would every truly be able to forgo our ultra high dependence on foreign oil would be to change our attitude towards our energy use all together through conservation and perhaps learning a thing or two from Japan.

 

[Iriemon]

The only benefit of such tax breaks are reserved to the companies themselves. It would be naive to think that drilling locally would ever be able to alleviate our dependence on foreign oil, in particular that of the middle east. Our demand is simply far too high. The only way we would every truly be able to forgo our ultra high dependence on foreign oil would be to change our attitude towards our energy use all together through conservation and perhaps learning a thing or two from Japan.

That was similar to my point -- the more we find now, the lower the price relatively is, and the faster we would use it the limited amount we have. It accomplishes the opposite of efficiency. Seems to me that is the opposite of what we should be doing.

 

[jfuh]

That was similar to my point -- the more we find now, the lower the price relatively is, and the faster we would use it the limited amount we have. It accomplishes the opposite of efficiency. Seems to me that is the opposite of what we should be doing.

I'm sorry, but your posts, to be honest, are a little beyond me. Why I leave the economics to you and just shut up about it. To be more honest, I didn't read your post :3oops:

 

[Iriemon]

I'm sorry, but your posts, to be honest, are a little beyond me. Why I leave the economics to you and just shut up about it. To be more honest, I didn't read your post :3oops:

LOL - I wasn't dissing ya, I thought your point was a good one and it was related to mine.

 

[Kandahar]

The whole concept of reducing our dependence on foreign oil is bullshit. The only way to do that is to reduce our dependence on ANY oil. If we produce a little more oil here, it doesn't mean that the money goes to Alaska instead of Iran. It just means that someone else buys oil from Iran that they would've bought from Alaska.

The only impact that increasing the domestic supply would have is to lower the price a VERY small amount...and that would be so insignificant, it's not even really worth considering as a solution to our dependence on foreign oil.

If we want to stop using oil, tax the oil companies. Make them (and their consumers) pay for the pollution and terrorism that they cause.

 

[jfuh]

The whole concept of reducing our dependence on foreign oil is bullshit. The only way to do that is to reduce our dependence on ANY oil. If we produce a little more oil here, it doesn't mean that the money goes to Alaska instead of Iran. It just means that someone else buys oil from Iran that they would've bought from Alaska.

The only impact that increasing the domestic supply would have is to lower the price a VERY small amount...and that would be so insignificant, it's not even really worth considering as a solution to our dependence on foreign oil.

If we want to stop using oil, tax the oil companies. Make them (and their consumers) pay for the pollution and terrorism that they cause.

After reading, kinda the point Iriemon and I made.

 

[Iriemon]

The whole concept of reducing our dependence on foreign oil is bullshit. The only way to do that is to reduce our dependence on ANY oil. If we produce a little more oil here, it doesn't mean that the money goes to Alaska instead of Iran. It just means that someone else buys oil from Iran that they would've bought from Alaska.

The only impact that increasing the domestic supply would have is to lower the price a VERY small amount...and that would be so insignificant, it's not even really worth considering as a solution to our dependence on foreign oil.

If we want to stop using oil, tax the oil companies. Make them (and their consumers) pay for the pollution and terrorism that they cause.

Well said. But wouldn't a tax on the product (gas) make more sense? Increasing the cost of fuel to users directly incentivizes efficiency. Increasing the tax on oil companies induces them to increase tax avoiding behaviors.

 

[Kandahar]

Well said. But wouldn't a tax on the product (gas) make more sense? Increasing the cost of fuel to users directly incentivizes efficiency. Increasing the tax on oil companies induces them to increase tax avoiding behaviors.

I think that a tax on gasoline probably would be more effective. But a tax on the oil companies might be easier to sell to the American people, despite being basically the same thing.

 

[Iriemon]

I think that a tax on gasoline probably would be more effective. But a tax on the oil companies might be easier to sell to the American people, despite being basically the same thing.

Makes sense.

 

[Stinger]

Actually it is. There's probably not enough unexplored oil in the United States to significantly change the price of a barrel of oil. And whether we actually buy it from Alaska or Iran is irrelevant, because oil is a fungible commodity.

I don't have any problem with more domestic drilling/refining if the local communities are willing to tolerate it, but it's certainly not the answer to our energy problems.

The best way to promote energy independence is to make people pay for the pollution and terrorism they cause by buying oil in the first place.

The best way to oil independence is to use our own resources as a bargaining chip, the Dems just stupidly played politics with our future.

 

[RightinNYC]

less spending, no complaints here.

 

[Iriemon]

The best way to oil independence is to use our own resources as a bargaining chip, .....

How do you mean?

 

[Kandahar]

The best way to oil independence is to use our own resources as a bargaining chip, the Democrats just stupidly played politics with our future.

Give me your best guess here. What percentage of the world's oil reserves do you think are located under American soil? Maybe 5% if we're optimistic? And that's AFTER it's explored and developed.

Someone with 5% of the market share doesn't have much control over the price of his oil.

 

[Stinger]

How do you mean?

The law of supply and demand.

 

[LaMidRighter]

However, the entire tax system is screwed up, and IMHO, the best solution is to dismantle the IRS completely, and put a national sales tax in its place. Instead of the IRS, you would have a Comptroller of National Accounts, which would see that sales taxes are collected from the businesses who collect them from the consumer.

I agree for the most part, the only thing that I would differ on is the comptroller. I think that the feds are already capable of enforcing tax evasion laws, maybe independent local agencies could created instead to report tax abuses to the feds to make the process efficient.

Many millionaires today pay no taxes whatsoever due to loopholes. Under the proposed National Sales Tax, there would be NO loopholes whatsoever. Everyone would pay the national tax on what they purchase. If a rich man wants to buy a boat, a Ferrari, or a race horse, he pays the tax. If a corporation wants to buy computers or copiers, they pay the tax. No tax on essentials or raw materials, but anything above that, everyone would end up paying his or her fair share.

The wealthy do actually pay quite a percentage in taxes, however they have the means to create avenues to exploit the loopholes to signifigantly reduce the tax hit they would take if all factors were equal.

This would be a much more equitable tax structure than exists at the present time.[/

no argument from me there.

 

[Stinger]

Give me your best guess here. What percentage of the world's oil reserves do you think are located under American soil? Maybe 5% if we're optimistic? And that's AFTER it's explored and developed.

Someone with 5% of the market share doesn't have much control over the price of his oil.

Whatever the best guess is today it will go up tomorrow. Just last year new techniques quadrupled what we can recover and the estimates of just the Gulf of Mexico went up 50%. And Alaska, we've only scratched the surface.

but again exactly how does penalizing domestic exploration and refining lead us to independence from foreign oil supplies?

 

[danarhea]

I agree for the most part, the only thing that I would differ on is the comptroller. I think that the feds are already capable of enforcing tax evasion laws, maybe independent local agencies could created instead to report tax abuses to the feds to make the process efficient.


The wealthy do actually pay quite a percentage in taxes, however they have the means to create avenues to exploit the loopholes to signifigantly reduce the tax hit they would take if all factors were equal.

no argument from me there.

1) Might be a good idea putting enforcement on local agencies. On one hand though, it would be fed money, and the feds would have more interest in enforcement. On the other hand, we all know that if the feds nationalized the beer industry, they could not make it for under $100.00 per six pack, so I am leaning in your direction now.

2) Closing loopholes is part of what it is all about.