The Senate failed to say no to $35 billion worth of tax breaks for the oil and gas industry on yesterday. I know, double negatives. But that’s the easiest way to describe it. You see, Senator Bernie Sanders (I-VT) introduced a provision that would have limited write offs for drilling expenses, eliminated a tax deduction for the capital costs of oil and gas wells and repealed a tax deduction for domestic production of oil and gas. He needed 59 additional votes. He got 34.
So, the Senate said no to no tax breaks: the oil and gas companies get to keep them.
The low vote may be a warning shot for President Obama: those same breaks are included in his proposed budget for next year. While I didn’t expect the measure to pass, I thought that there might be more support – the timing was pretty good considering Obama’s “fire and brimstone” speech hammering BP. A poll showed that 75% of Americans blame BP “a great deal” for the spill (and I’m still scratching my head trying to figure out who the 2% of respondents are who thought BP wasn’t to blame at all – really, people?). Anti-oil company sentiment is probably at its peak right now so if you can’t get this measure through this year… well, I don’t see it happening next year.
Sanders, however, didn’t focus on the spill, though he did make reference to the environment, garnering support from organizations like the Sierra Club. Instead, Sanders stressed the economics of the provision, writing to his colleagues:
Over the last decade, the five largest oil companies (Exxon Mobil, Chevron, ConocoPhillips, BP and Shell) made more than $750 billion in profits. These profitable companies simply don’t deserve tax relief. With a record-breaking $13 trillion national debt and an unsustainable federal deficit, the last thing we should be doing is giving tax breaks to oil and gas companies that have been making enormous profits.
Sanders went on to note that Exxon Mobil, which he called “the most profitable corporation in the world” not only paid no US taxes last year, but also received a $156 million tax refund. Other federal tax refunds from last year included $19 million to Chevron and $157 to Valero Energy.
Nonetheless, Sanders’ arguments failed to sway Republican votes and most Democrats, despite the fact that the bill was co-sponsored by some fairly high-powered Democrats including Sen Frank Lautenberg (D-NJ). No word yet on whether there might be an alternate proposal.Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel.