Earlier this month, the New York Times reported on the massive subsidies that the U.S. government hands out to oil companies, despite the industry’s record-setting profits in recent years. The tax breaks and loopholes even enabled BP to write off 70 percent of the rent it paid on the Deepwater Horizon rig that exploded and started the gulf oil spill.
However, attempts to curtail the subsidies have proved fruitless. Last month, an amendment proposed by Bernie Sanders (I-VT) that “would have cut $35 billion in tax subsidies to Big Oil companies” failed to pass, 35-61. Every GOP senator voted against the measure. Lobbyists for the industry have so far been successful in “scar[ing] lawmakers into believing that ending subsidies…will wreak havoc on the American economy” even though “the evidence suggests otherwise.” The Treasury Department estimates that ending the subsidies would decrease domestic oil production by less than one half of one percent.
A new report from the Citizens for Tax Justice confirms that eliminating the numerous tax loopholes for the oil industry is a no-brainer:
In the wake of the disastrous oil spill in the Gulf of Mexico, the public and the media have turned their attention to some of the subsidies provided through the tax code to BP, the corporation that leased the ill-fated Deepwater Horizon drilling platform. The truth is that oil and gas companies have for years received a bonanza of unjustified tax breaks that serve only to boost profits for their shareholders. [...] To the extent that tax loopholes targeting the oil and gas industry boost their profits, there is no evidence that the additional profits lead the companies to explore for more oil so that they can increase the supply Nor does the current tax treatment of oil and gas companies encourage them to develop alternative energy.
Undeterred by unanimous Republican opposition to Sanders’ amendment, Sen. Robert Menendez (D-NJ) is working on a bill that would end billions of dollars in oil industry tax breaks. Perhaps his GOP colleagues will be persuaded by conservative New York Times columnist Ross Douthat, who today blasted corporate tax breaks like those we give to Big Oil:
In case after case, Washington’s web of subsidies and tax breaks effectively takes money from the middle class and hands it out to speculators and have-mores. We subsidize drug companies, oil companies, agribusinesses disguised as “family farms” and “clean energy” firms that aren’t energy-efficient at all. We give tax breaks to immensely profitable corporations that don’t need the money and boondoggles that wouldn’t exist without government favoritism.
With oil gushing in the gulf, BP’s profits soaring, and bipartisan support for ending oil industry subsidies — an act that is projected to save the U.S. government $45 billion over 10 years — it’s hard to believe that we’re still fighting to end them.
House Minority Whip Rep. Eric Cantor (R-VA) has been one of the Recovery Act’s most vocal critics. After whipping his caucus into uniformly opposing the stimulus, Cantor has been the lead spokesman decrying the program as a failure. Ignoring evidence that that the stimulus is helping to 
