GOP’s austerity budget apparently gives Big Oil a free ride


Tax receipts as a share of GDP

A government shutdown over the 2011 budget seems increasingly possible.  The uncompromising Tea Party extremists who hold sway in the House are demanding deep cuts in clean energy funding and EPA oversight, along with their other slash and burn proposals.

Into this mix, the House GOP is going to offer their 2012 austerity budget tomorrow.  As Faiz Shakir explain in this Think Progress repost, however, austerity doesn’t apply to Big Oil or the super-rich.

On Tuesday, House Budget Committee Chairman Paul Ryan (R-WI) plans to lay out his proposed budget for the next fiscal year. Promoting his plan on Fox News Sunday this morning, Ryan made clear that his plan for deficit reduction would demand drastic spending cuts shouldered on the backs of low- and middle-income Americans without asking for similar sacrifice from the wealthy. Asked repeatedly by host Chris Wallace whether he’ll eliminate tax breaks for oil companies, Ryan hemmed and hawed without giving a clear answer:

WALLACE: A lot of Democrats that are already saying, even before they’ve seen your budget, that you do all of this balancing of the budget on the spending side, and unlike the President’s debt commission, you don’t do it on the revenue side. Do you eliminate tax breaks? Do you bring in new revenue by eliminating, for instance, tax breaks for oil companies?

RYAN: We don’t have a tax problem. The problem with our deficit is not because Americans are taxed too little. The problem with our deficit is because Washington spends too much money. “¦ So we’re not going to down the path of raising taxes on people. [“¦]

WALLACE: But for instance, you will not eliminate tax breaks for Big Oil and Gas?

RYAN: Those are the kinds of details that we’ll come out later with, that the Ways and Means Committee will work on. We’re not going to go into the little details of which tax expenditure goes and which tax expenditure stays.

Ryan has no problem discussing details of his budget plan that impose higher taxes on 90 percent of Americans and relies squeezing Medicare and Medicaid. But when pressed on details about cutting corporate welfare, he had nothing to say. But previously, he’s been more blunt, calling the idea of ending taxpayer handouts to oil and gas companies “ridiculous economics.”

Ryan is wrong about one key point “” there is, in fact, “a tax problem.” Federal tax receipts are at the lowest levels since 1950. As this graph produced by CAP’s Director for Tax and Budget Policy Michael Linden demonstrates, tax receipts as a percentage of GDP dropped precipitously following the Bush tax cuts [see figure above].

According to the Office of Management and Budget, corporate tax receipts will account for just 7.2% of federal revenues in 2010, with large corporations contributing less than one-sixth as much as small business and individual taxpayers to the federal treasury. Exxon-Mobil, for instance, paid $15 billion in taxes in 2009, but not a penny of those taxes went to the American Treasury. Because oil and gas companies receive generous tax subsidies, the U.S. government loses about $4 billion in revenue a year.

Paul Ryan’s budget will demand that working Americans give up health care and pension benefits that they’ve earned, while asking nothing from hugely profitable corporations that are failing to meet their tax responsibilities.

Faiz Shakir, in a TP repost

6 Responses to GOP’s austerity budget apparently gives Big Oil a free ride

  1. Mike Roddy says:

    Republicans are not allowed to say anything that could even slightly reduce oil company profits. This is worse than the Gilded Age- at least we needed the railroads and steel companies.

    About a year ago Obama mentioned reducing oil company tax breaks and subsidies almost apologetically, and quickly dropped it. Other Democrats have been silent- we shouldn’t have to wait for Bernie Sanders or a House Democrat like Inslee to speak up. Ex Republican governor Szwarzenegger has spoken more bluntly on this than any of the Democrats.

    Maybe progressive should start by shaming the Democratic leadership. If people like Reid or Webb actually stepped up here, the battle would be over and the Republicans would have to retreat. Americans have figured out that shoveling public money to oil companies is a loathsome thing to do.

  2. Lou Grinzo says:

    We have two political parties in the US in 2011.

    One without a heart and one without a spine.

  3. Bill W says:

    Props, for once, to Fox News for asking the right questions!

  4. Chris Winter says:

    Mother Jones has coverage of Senator Bernie Sanders’ list of the top ten corporate tax evaders. (Or should I say tax avoiders?)
    Bernie Sanders’ Top 10 Tax Avoiders

    — By Michael Mechanic, Mother Jones | Tue Mar. 29, 2011 3:30 AM PDT

  5. Mulga Mumblebrain says:

    The situation is identical in Australia. During the Howard years from 1996 to 2007, the very nadir morally and spiritually in this country’s history, so far, the ruling Liberal kakistocrats brought in numerous tax reduction schemes, all of which grotesquely favoured the rich. They then lied, with explicit MSM propaganda assistance, in maintaining that they had ‘looked after the poor and middle’ so it was time to cut taxes on the rich. The only way they ‘looked after’ the poor was by introducing a viciously regressive Goods and Services tax, and in massively increasing penalties on welfare recipients for the minutest infractions of increasingly draconian ‘mutual obligations’. Towards the end of their baleful regime they also introduced superannuation rorts that allowed the rich to secrete millions, tax free, in superannuation accounts. They also slashed capital gains taxes, another boon to the rich.
    The problem with elite greed and the services provided by their political toadies is that parasite class avarice is literally insatiable. The more they have the more they desire.The pathopsycholgical roots of this disease of the soul are pretty easily discerned. That their greed impoverishes others is well-known to the parasite class and that is precisely one of its attractions. Unless you recognise and comprehend just how deep is the parasite’s contempt and disdain for others, you will never appreciate just where we are heading. Indeed, to all intents and purposes the capitalist West, led by the USA, has already arrived at the parasites’ Nirvana, the neo-feudal Elysian Fields of limitless privilege and wealth, while 90% plus of the population scrabbles about entertainingly fighting over the scraps that fall from the High Table. They will go on pushing and pushing, destroying unions, then wages, conditions, pensions, healthcare (such as it is) public education until most of the population have been reduced to ‘untouchable’ serfdom, or until the plebs rise up. But they are well prepared for that eventuality, too,

  6. Chris Winter says:

    Robert Reich: Why we must raise taxes on the rich