New revenue data from the independent congressional Joint Committee on Taxation, JCT, requested by Senator John Kerry (D-Mass.) and Rep. Jim McDermott (D-Wash.), show a gusher of subsidies- as much as $700 million every year- is flowing to oil and natural gas companies at the expense of U.S. taxpayers, because of an unearned and necessary windfall given away by the Republican majority. The price tag exceeds $5 billion over ten years – at least $1.4 billion more than previous estimates.
Rep. Jim McDermott said: “Big Oil is winning a multi-million dollar lottery every day of the week, every day of the year, because the game has been rigged by a Republican Congress and President. Big Oil does not deserve the multi-billion dollar tax subsidy, but Republicans gave it to them, anyway.”
“It’s clear every time people fill up at the pump that the Bush energy policy is not working. The fact that American taxpayers have to give away more money to oil companies as their profits increase is absurd – it’s like a kick in the stomach on top of a $60 tank of gas,” said John Kerry.
Adding insult to injury, the lawmakers pointed out that the windfall tax subsidy actually increases as oil and gas prices increase.
In 2004, Congress sought to protect U.S. manufacturers who export from possible WTO sanctions over a broad, international trade dispute. To do this, Congress first repealed a complex tax provision called the FSC/ETI regime. Then, to shield U.S. companies who exported under FSC/ETI from a sudden, massive tax increase, Congress passed a corporate tax bill which gradually reduced taxes over several years, and was intended to help domestic manufacturers struggling to sell their products overseas. FSC/ETI regime never applied to Big Oil; in fact, Congress explicitly precluded oil company exports from the FSC/ETI benefit. However, when a new law was passed, Republicans made sure Big Oil got a break they didn’t earn, deserve, or need.
The fix for Big Oil came within the 2004 corporate tax bill that Republicans sold as the JOBS Act.
“Republicans did a job in that bill alright,” McDermott said, “of diverting the attention of the American people by bold facing the name and boldly rewarding Big Oil, instead.”
“It’s time we stop multi-billion dollar giveaways, financed by the American people, to the richest companies in America” added Kerry.
Rep. McDermott introduced H.R. 5218 in the House and Senator Kerry introduced S. 2672 in the Senate to stop the needless flow of U.S. taxpayer money out of the U.S. Treasury and into the profit statements of Big Oil. Action on these bills is pending in both chambers.