The Big Oil companies last week announced their first quarter profits “” which topped $32 billion for the five biggest companies combined, and were nearly $11 billion for Exxon alone “” prompting Congressional Democrats and the Obama administration to, once again, call for ending the nearly $4 billion in subsidies that these companies receive every year. “When oil companies are making huge profits and you’re struggling at the pump, and we’re scouring the federal budget for spending we can afford to do without, these tax giveaways aren’t right,” Obama said in his weekly address.
A few Republicans have broken with their party “” which has voted over and over to preserve these subsidies “” by saying that the time has come to cut taxpayer giveaways to Big Oil. But while he was in New Hampshire over the weekend, 2012 GOP hopeful Mitt Romney was asked about oil subsidies and replied “I haven’t looked at it in sufficient depth.” However, he added that corporate taxes need to be cut:
“I’m not planning any new subsidies for the oil industry,” Mr. Romney said. But when asked if tax breaks should be cut, he responded that corporate taxes, across the board, should be lowered. “As the specifics of that industry, I haven’t looked at it in sufficient depth.”
If Romney wants to read up on what, exactly, these subsidies amount to, the Sunlight Foundation has a good rundown here. At the same time that they’re collecting billions in taxpayer-funded largesse each year and reaping huge profits, oil companies are using that money to enrich executives. In 2009, almost 90 percent of net revenue at the four biggest oil companies went to paying dividends and buying back stock.
As for Romney’s contention that corporate tax rates need to be lowered, he might want to note that several oil companies already pay far below the statutory corporate tax rate. Exxon, for instance, paid nothing into the U.S. Treasury in 2009. Of Chevron’s $8 billion in income taxes that year, just $200 million was paid to the U.S.
Romney is not the only one feeling the pressure when it comes to oil subsidies. Both Speaker John Boehner (R-OH) and House Budget Committee Chairman Paul Ryan (R-WI) called for an end to the subsidies, before walking those pronouncements back.
— A Wonk Room cross-post.