Senate rejects oil and gas tax increases

Today the Senate defeated a measure, 51-47, that would “end tax breaks for major oil companies,” as CNN puts it:

In remarks shortly before the Senate voted, Obama said the nation will be watching to see where Congress stands on the issue.

“With record profits and rising production, I’m not worried about the big oil companies,” Obama said in the White House Rose Garden. “… I think it’s time they got by without more help from taxpayers, who are having a tough enough time paying their bills and filling up their tanks.”

This continues the President’s curious tradition of thinking that the free citizens of a republic should care what a politician thinks about anyone’s profit margins.  Such opinions only become important in the absence of economic liberty, prosperity, and self-determination.

Still, he’s got a point that oil companies making 50 cents on the dollar is pretty outrageous.  Oh, wait, sorry, that’s how much the government makes on oil.  The net profit margin of oil and natural gas companies, according to a CNS News report from last summer, is 5.7 cents on the dollar.  The top three oil companies paid $42.8 billion in income taxes in 2010, but apparently that’s nowhere near enough.

Of course, Obama doesn’t want to end all “tax breaks” and “subsidies.”  He specifically said he wants to pour more money into those disastrous, but politically favored, “green energy” investments that generate little besides bankruptcy:

“Instead of taxpayer giveaways to an industry that’s never been more profitable, we should be using that money to double down on investments in clean energy technologies that have never been more promising,” Obama said. “Investments in wind power and solar power and biofuels; in fuel-efficient cars and trucks and homes and buildings. That’s the future. That’s the only way we’ll break this cycle of high gas prices that happens year after year after year as the economy is growing.” 

It’s amazing how “giveaways” magically become “investments” when you take the money away from something that works, and give it to something that doesn’t.

If you’re interested in thinking about all this logically, keep in mind that those green boondoggles already get far more tax support than oil.  In fact, if you factor in the number of kilowatt-hours produced, wind energy gets one thousand times the subsidies that oil receives, despite wind generating an utterly irrelevant portion of our energy needs.  All of Obama’s beloved green energy sources combined – wind, solar, biofuels, geothermal – account for perhaps 12 percent of our power supply.  So, of course, it makes perfect sense to increase the cost of the oil we actually need, and dump more cash into these boutique projects.

As Brian Johnson of the American Petroleum Institute told CNN, one of the deductions Obama wanted to take away, the domestic manufacturing deduction of 6 percent, is actually much higher for industries such as Starbucks.  It would seem the “all-of-the-above” energy strategy this President advocates doesn’t include oil, gas, coal, or nuclear power, but it does embrace the awesome power of the venti double latte.

Just for good measure, Obama threw in his hoary and discredited lie about America having only “2 percent of the world’s known oil reserves.”  Once again, for anyone who still falls for this line, he’s talking about oil fields already under development in the United States, not the oil still available to us.  The truth is 40 to 60 times higher than the number Obama keeps using.  If his energy policy is so brilliant, why does he have to keep pushing it with an easily disproven falsehood?

Although this tax-raising initiative, which of course would have led to even higher prices at the pump, was given little chance of passage, the President insisted on wasting America’s time with it, because there are polls showing Americans are willing to put the blame for high gas prices on the oil companies.  Nevertheless, four Democrats voted against the President’s quest for five-dollar gasoline, making this Senate action one of those “bi-partisan” votes you occasionally hear about.