As anyone who drives a car knows, gas prices are rising almost by the minute. Oil companies profits are likewise on the ascendance, as gas revenues skyrocket, and tax subsidies make sure they don't have to pay much over to Uncle Sam.
Oil company executives from BP, Chevron, Shell, ConocoPhillips, and ExxonMobil were called to Congress Thursday to talk to the Senate Finance Committee about their tax breaks-- like the oil depletion allowance and the wacky "domestic manufacturing deduction" that Congress enacted as a giveaway for almost all domestic companies when it fixed the problematic provision that discriminated against foreign companies.
Company executives didn't like the fact that Americans are apparently becoming much more aware of the extraordinary tax breaks that they have enjoyed for decades, so they couched their objections in terms of the current craze for "corporate tax reform" (which means reducing, probably only temporarily, some of the tax expenditures favoring corporations and using the revenues gained from that to cut tax rates on corporations--a stupid proposal when we should be using the revenues saved to fund government programs and reduce borrowing). Of course, the executives also rattled off their usual warning that taking away their special tax breaks would end up reducing domestic production. Since domestic production doesn't really affect the price we pay for gas at the pump, this argument is akin to the "give us tax breaks so we can compete" argument. They both amount to the same thing--the claim that if only companies have to pay even less in taxes, they will use the money saved to do good things.
Sen. Orrin Hatch (R-Utah) helped the corporatist message along in his opening remarks. As the Daily Tax Report for May 13, 2011 (93 DTR G-4) notes, Hatch asked “With respect to tax incentives available for all U.S. manufacturers, is it wise—and this is an important question—is it wise to single out one industry and treat it differently from others?” And Louisiana Senator Mary Landrieu, from a Big Oil state, predictably opposes the bill.
For once, Baucus seemed to be moving towards the right side of this debate. Even though he agreed that all of the Code provisions should be examined in due time (especially those silly "extenders" that Congress can't seem to treat as the temporary provisions that they were created to be), he talked about the importance of using the elimination of oil and gas subsidies to make real progress in reducing the deficit. But he still hasn't indicated whether he supports S. 940, the bill that Charles Schumer is trying to get through Congress, which would take $21 billion saved by repeal of the subsidies and use it to cut the deficit.