The top five oil companies in the United States have already made $5.8 billion in windfall profits from spiking gasoline prices this year. Yesterday, Senate Republicans agreed to debate a bill that repeals $2 billion in annual tax breaks for these super-wealthy oil giants. The move was purely a political calculation — don’t expect the GOP to end taxpayer welfare for their Big Oil allies. GOP senators like Rand Paul (R-KY) and Jon Kyl (R-AZ) have used their time on the Senate floor today to push error-riddled arguments coming straight from their oil industry donors.
Paul argued Big Oil deserves even more favors from government, because they’re doing such a good job extracting wealth from American families:
Instead of punishing them, you should want to encourage them. I would think you would want to say to the oil companies, “What obstacles are there to you making more money?” And hiring more people. Instead they say, “No, we must punish them. We must tax them more to make things fair.” This whole thing about fairness is so misguided and gotten out of hand.
“We as a society need to glorify those who make a profit,” Paul concluded.
In his floor speech, Kyl claimed that ending the tax breaks would be “discriminatory.”
The five major oil companies are some of the largest and most profitable corporations in the world, increasingly at the expense of the rest of humanity. The big five companies enjoyed record levels of $137 billion profits last year, while paying absurdly low tax rates. Exxon is the most profitable, making $1300 per second in 2011, but it only paid a 13 percent tax rate, according to a Reuters analysis. The oil industry claims it pays a higher tax rate — but it counts foreign taxes and deferred taxes.
The industry is set to make even higher profits from record gas prices. A Center for American Progress analysis shows that for every penny rise in gas, the big five companies gain $200 million more in profit. Republican senators are asking to boost Big Oil’s profits at the expense of the 99 percent.
Meanwhile, the oil industry is not using its profits to hire more people. Paul falsely claimed the oil companies employ 9.2 million people — in fact, there are only 2.2 million jobs in the entire oil industry, and 40 percent of those jobs are minimum-wage work at gas stations. Exxon Mobil, Chevron, Shell, and BP have shed their U.S. workforce by 11,200 between 2005 to 2010, according to a report last year. Big Oil isn’t investing in renewable energy or in reducing oil spills, either.
Strangely, while Kyl and Paul called an end to oil subsidies indefensible, they used the opportunity to label clean energy tax credits “crony government.” During his clean energy rant, Paul said:
It doesn’t seem to right that your tax dollars are sent to companies just because they’re big contributors.
Republicans have received 88 percent of donations from the oil industry’s coffers. In the Senate, Republicans have taken over $13.8 million from oil, compared to the Democrats’ $3.3 million, meaning Senate Republicans have taken four times the amount in Big Oil contributions as Democrats. Kyl is the No. 29 largest recipient in the Senate from oil and gas in career contributions with over $330,000and Paul has received over $106,000 from oil.