Bill introduced in US Senate that would repeal tax breaks for major oil firms
By Ben DuBose
US Senators introduced a bill on Tuesday that would repeal tax breaks for the five biggest oil companies, including Shell, ExxonMobil, BP, Chevron and ConocoPhillips.
The legislation, proposed by Democratic Senators Robert Menendez, Sherrod Brown and Claire McCaskill, would cut off those companies from subsidies such as deductions originally created to boost manufacturing.
In addition, the bill would close a loophole that effectively allows oil companies to shield themselves from taxes by deducting royalties paid to foreign governments, the Associated Press reported.
The bill’s sponsors say it would save US taxpayers above $2 billion per year, potentially easing US budget deficits.
Each of the five targeted oil companies posted first-quarter profits, with President Barack Obama repeatedly blaming such firms for rising retail gasoline costs.
“If we can’t end subsidies to the five biggest, most profitable corporations in the history of the planet, then I don’t think anybody should take us seriously about deficit reductions,” McCaskill (D-Missouri) told reporters in Washington.
“This ought to be the essence of low-hanging fruit,” she added.
Republicans, however, are expected to try and delay the bill.
The GOP has generally opposed the repealing of oil tax breaks, claiming that such a practice would likely further increase gasoline prices as companies pass on costs to consumers.
In addition, any bill seeking to repeal oil tax breaks could face stiff opposition in the US House of Representatives, which unlike the Senate is controlled by Republicans.
The National Petrochemical & Refiners Association (NPRA) argued that the bill unfairly targets only five companies, putting them at a competitive disadvantage with the rest of the industry and economy.
“Is it a noble cause to penalize one individual segment of an industry?” said Charles Drevna, president of the NPRA, in an interview with news agency Reuters.
“If you are going to tackle deficit spending, the entire tax code needs to be addressed,” he added.
The Senate Finance Committee has asked for executives from each of the companies to appear at a Thursday hearing (May 12) on oil tax incentives and rising energy prices.
The legislation is presently scheduled for a vote in the Senate next week.
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