Thursday, 23 October 2014 / TRUTH-OUT.ORG

Taxpayers Subsidize Big Oil, World's Most Profitable Industry

Friday, 20 May 2011 10:49 By Madeleine Austin and Rinaldo Brutoco, Truthout | Op-Ed
Taxpayers Subsidize Big Oil Worlds Most Profitable Industry

Rex Tillerson, chief executive of Exxon Mobil, arrives to testify before a Senate Finance Committee hearing on oil company subsidies on Capitol Hill in Washington, on May 12, 2011. Tillerson called proposed cuts in tax subsidies for the oil industry "misinformed and discriminatory" as well as "counterproductive." (Photo: Stephen Crowley / The New York Times)

The US Senate couldn't muster the votes to end $2 billion a year in taxpayer subsidies for the five biggest US oil companies. The House had already voted to block efforts to repeal tax breaks for Big Oil, in sharp contrast to its vote to strip tax credits for small business health insurance.

The Congressional votes create a strong contrast between the US and other countries, including Germany, China, the Scandinavian countries, and most recently, Japan, who are leading the way to a
new planetary fuel system that will replace oil and nuclear energy with renewable energy. In response to its nuclear disaster, Japan has renounced its plans to build new nuclear plants and announced it will redo its energy system "from scratch." Germany is using the Fukushima disaster as an opportunity to curtail nuclear power and boost its strong clean technology export sector. Other countries have curtailed or suspended their nuclear plans. But the United States, once a leader in science and technology that beat other countries to the moon, remains controlled by money politics, Big Oil, and climate deniers.

The oil industry is the most profitable industry in the world. US oil companies earn about $3 billion in profits every week, yet get $4 billion in taxpayer subsidies every year. In the first quarter of 2011, Big Oil's profits were up 38% from the first quarter of 2010.

The industry's outsize profits didn't stop it from squealing like a stuck pig over proposals to trim $2 billion from its annual subsidies and use the revenue to reduce the deficit by about $21 billion over 10 years.

The oil companies tried to characterize the end of their subsidies as a "tax hike," despite growing and widespread recognition across the political spectrum that tax breaks are just another form of government spending, one of several ways to provide direct support for an industry. Before becoming Speaker, John Boehner (R-Ohio) admitted that "tax deductions, credits, and special carve-outs . . . what Washington sometimes calls tax cuts are really just poorly disguised spending programs …."

As a recent Washington Post editorial about such "tax expenditures" pointed out, "an astonishing amount of "spending"—more than $1 trillion annually—is accomplished through the tax code, by way of tax credits or deductions. But there is little conceptual difference between billions spent to directly subsidize particular programs and billions spent indirectly in tax preferences. Either way, it's money the government does not have, and that adds to the deficit."

The Senators who opposed ending the oil subsidies received 5 times more in campaign cash from the oil industry during their time in Congress than the Senators who favored ending the subsidies (on average, $370,664 versus $72,145), according to an Oil Change International and Public Campaign Action Fund analysis of data from the Center for Responsive Politics.

 

Who’s benefitting from the US oil industry's taxpayer subsidies? Certainly the oil companies' CEOs. Last year the CEO of Occidental Petroleum, the 4th largest US oil and gas company based on market capitalization, was near the top of a list of the median pay for top executives at 200 major companies. Occidental's CEO took home $76.1 million, up 142% from the year before, despite a majority "no" vote by shareholders on his pay package.

Exxon CEO Rex Tillerson earned $21.7 million in 2009—12 times more than the $1.8 million earned last year by the CEO of the Norwegian energy company Statoil, which is 2/3 owned by the Norwegian government. Tillerson’s pay was "more than double the combined $8.3 million that Statoil paid its nine top executives in 2010." [The comparisons are based on the most recent pay figures available.]

The average American pays a higher income tax rate than ExxonMobil, which is the most profitable Fortune 500 company for the 8th year in a row.

The Senate plans to have another go at the taxpayer subsidies later this year. Sign the Friends of the Earth petition and tell your Senators to "End the giveaway to Big Oil."

 

 

Rinaldo Brutoco

Rinaldo Brutoco is a well-known futurist and the founding president of the World Business Academy, a nonprofit think tank launched in 1987 with the mission to educate and inspire the business community to take responsibility for the whole of planetary society. He is a frequent public speaker and a prolific author on renewable energy, climate change and sustainable business strategies. He is the co-author of "Freedom from Mid-East Oil" (2007), a leading book on energy and climate change and "Profiles in Power" (1997), a college textbook on nuclear power and the dawn of the solar age.

Madeleine Austin

Madeleine Austin is vice president of the World Business Academy. She is the co-author with Rinaldo Brutoco of various articles, including "The Nuclear Nemesis Redux" (Forum CSR International, Dec. 2008) and "Japan's Nuclear Kamikazes," March 2011.


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Taxpayers Subsidize Big Oil, World's Most Profitable Industry

Friday, 20 May 2011 10:49 By Madeleine Austin and Rinaldo Brutoco, Truthout | Op-Ed
Taxpayers Subsidize Big Oil Worlds Most Profitable Industry

Rex Tillerson, chief executive of Exxon Mobil, arrives to testify before a Senate Finance Committee hearing on oil company subsidies on Capitol Hill in Washington, on May 12, 2011. Tillerson called proposed cuts in tax subsidies for the oil industry "misinformed and discriminatory" as well as "counterproductive." (Photo: Stephen Crowley / The New York Times)

The US Senate couldn't muster the votes to end $2 billion a year in taxpayer subsidies for the five biggest US oil companies. The House had already voted to block efforts to repeal tax breaks for Big Oil, in sharp contrast to its vote to strip tax credits for small business health insurance.

The Congressional votes create a strong contrast between the US and other countries, including Germany, China, the Scandinavian countries, and most recently, Japan, who are leading the way to a
new planetary fuel system that will replace oil and nuclear energy with renewable energy. In response to its nuclear disaster, Japan has renounced its plans to build new nuclear plants and announced it will redo its energy system "from scratch." Germany is using the Fukushima disaster as an opportunity to curtail nuclear power and boost its strong clean technology export sector. Other countries have curtailed or suspended their nuclear plans. But the United States, once a leader in science and technology that beat other countries to the moon, remains controlled by money politics, Big Oil, and climate deniers.

The oil industry is the most profitable industry in the world. US oil companies earn about $3 billion in profits every week, yet get $4 billion in taxpayer subsidies every year. In the first quarter of 2011, Big Oil's profits were up 38% from the first quarter of 2010.

The industry's outsize profits didn't stop it from squealing like a stuck pig over proposals to trim $2 billion from its annual subsidies and use the revenue to reduce the deficit by about $21 billion over 10 years.

The oil companies tried to characterize the end of their subsidies as a "tax hike," despite growing and widespread recognition across the political spectrum that tax breaks are just another form of government spending, one of several ways to provide direct support for an industry. Before becoming Speaker, John Boehner (R-Ohio) admitted that "tax deductions, credits, and special carve-outs . . . what Washington sometimes calls tax cuts are really just poorly disguised spending programs …."

As a recent Washington Post editorial about such "tax expenditures" pointed out, "an astonishing amount of "spending"—more than $1 trillion annually—is accomplished through the tax code, by way of tax credits or deductions. But there is little conceptual difference between billions spent to directly subsidize particular programs and billions spent indirectly in tax preferences. Either way, it's money the government does not have, and that adds to the deficit."

The Senators who opposed ending the oil subsidies received 5 times more in campaign cash from the oil industry during their time in Congress than the Senators who favored ending the subsidies (on average, $370,664 versus $72,145), according to an Oil Change International and Public Campaign Action Fund analysis of data from the Center for Responsive Politics.

 

Who’s benefitting from the US oil industry's taxpayer subsidies? Certainly the oil companies' CEOs. Last year the CEO of Occidental Petroleum, the 4th largest US oil and gas company based on market capitalization, was near the top of a list of the median pay for top executives at 200 major companies. Occidental's CEO took home $76.1 million, up 142% from the year before, despite a majority "no" vote by shareholders on his pay package.

Exxon CEO Rex Tillerson earned $21.7 million in 2009—12 times more than the $1.8 million earned last year by the CEO of the Norwegian energy company Statoil, which is 2/3 owned by the Norwegian government. Tillerson’s pay was "more than double the combined $8.3 million that Statoil paid its nine top executives in 2010." [The comparisons are based on the most recent pay figures available.]

The average American pays a higher income tax rate than ExxonMobil, which is the most profitable Fortune 500 company for the 8th year in a row.

The Senate plans to have another go at the taxpayer subsidies later this year. Sign the Friends of the Earth petition and tell your Senators to "End the giveaway to Big Oil."

 

 

Rinaldo Brutoco

Rinaldo Brutoco is a well-known futurist and the founding president of the World Business Academy, a nonprofit think tank launched in 1987 with the mission to educate and inspire the business community to take responsibility for the whole of planetary society. He is a frequent public speaker and a prolific author on renewable energy, climate change and sustainable business strategies. He is the co-author of "Freedom from Mid-East Oil" (2007), a leading book on energy and climate change and "Profiles in Power" (1997), a college textbook on nuclear power and the dawn of the solar age.

Madeleine Austin

Madeleine Austin is vice president of the World Business Academy. She is the co-author with Rinaldo Brutoco of various articles, including "The Nuclear Nemesis Redux" (Forum CSR International, Dec. 2008) and "Japan's Nuclear Kamikazes," March 2011.


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blog comments powered by Disqus