Cut tax breaks for Big Oil

By Telegraph Herald

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It was disappointing that U.S. Senate Republicans blocked an effort to curb tax breaks for Big Oil companies.

If you have an opportunity to talk to Sen. Chuck Grassley or one of his colleagues about this, you'll probably hear a lot about the politics behind the vote. We're less concerned with how that shakes out than these basic facts:

Fact 1: Gasoline is retailing at just under $4 per gallon in this area and even more elsewhere.

Fact 2: Despite recent drops in the price of a barrel of oil on world markets, gasoline prices haven't moved.

Fact 3: This legislation would have closed the tax loophole afforded BP, Exxon Mobil, Shell, Chevron and Conoco Phillips, resulting in increased federal tax revenues of $21 billion over 10 years.

Fact 4: Oil companies say they need these tax breaks because oil exploration is expensive.

Fact 5: Oil companies' profits are through the roof. Exxon profits are up nearly 70 percent over a year ago. Shell is up 60 percent. That's largely because we are all paying more for gas.

That's about all most Americans need to know. When an industry pulls in $80 billion as Big Oil did in 2010, why do they need another $5 billion in taxpayer money?

Whatever political gamesmanship was behind the party line vote, Republican should take note: Americans are tired of supporting wealthy industry. An NBC/Wall Street Journal poll earlier this year showed three out of four Americans said it is time government cut off the subsidies to Big Oil.

This isn't meant to be punitive. Oil companies have a right to make money. And it is not the job of Congress to set the price of gasoline. But Congress does have a role in ensuring that vital commodities are traded fairly in the marketplace. Someone should be questioning the oil industry. Questions such as: Do gasoline prices need to be so high if you enjoyed record-breaking profits last year? Why does the price of gasoline rise immediately when the price of oil rises, but takes much longer to fall when the price of oil drops?

Certainly, oil companies have to keep exploring for oil and maintaining refining facilities. And that costs money. Lots of money. But aren't those costs figured into annual expenses - before the profit line? And the net result was still record profits?

While we're facing trillion-dollar deficits in this country, it should be obvious to everyone in Congress that there are myriad better uses for our tax dollars. Big Oil doesn't need our help to survive.