Obama’s oil tax

By Christopher R Rice Underground Newz

As things stand now, with federal taxes, state taxes, county tax, sales tax, property taxes, car tax, gas tax, phone taxes, etc. “They” take 4 months of our wages every year in taxes. For that kind of money we should have the best schools on the planet, right? But every year 30 to 50% of our kids get left behind. Let me repeat, taxes take 4 months of your wages away from you every year. That's true under Republicans or Democrats! 

A $10-a-barrel tax on oil would translate into higher prices for gasoline at the pump.

The White House on Thursday said President Barack Obama will propose a $10-a-barrel tax on each barrel of oil to pay for clean transportation projects. The tax, which will be part of the budget request Obama sends to Capitol Hill next week, would be paid by consumers at the pump.

“This proposal will trickle down and be a $10 per barrel tax on motorists—or 60 to 95 cents per gallon on refined fuels,” said Patrick DeHaan, senior petroleum analyst at GasBuddy.com. “To me it’s clear: this is not something oil companies are going to absorb.”

On Friday, West Texas Intermediate crude  settled at $30.89 a barrel.

And it won’t just impact gasoline prices, but also diesel, jet fuel, heating oil and others, DeHaan said. “It could stifle production to some degree, though to a lesser degree as long as the tax applies to imported oil as well.”

Earlier this month, BP PLC  said it would cut another 3,000 jobs by the end of 2017 after reporting a full-year loss of $5.2 billion. Royal Dutch Shell  this week reported its worst profits in over a decade.

Obama is adamant about the advantages the tax will create. “We’ll look back and say that was a smart investment. It’s right to do it now, when gas prices are really low,” “I can slip the tax through…without many realizing that they’re paying the government more to fuel their vehicles and warm their houses because oil and gasoline prices are low right now” he said Friday.

On Friday afternoon, the average price for regular gasoline at pump stood at $1.747 a gallon, according to GasBuddy. That’s down 40.5 cents from last year’s average of $2.152. Gasoline futures also dropped below $1 a gallon on Friday for the first time since late 2008.


Tax loopholes allow Big Oil companies to ratchet up their annual earnings at the expense of American taxpayers. Well-placed campaign contributions to their congressional allies preserve these undeserved handouts.  Daniel J. Weiss and Valeri Vasquez have the detailed numbers in a CAP repost.

The cost of Big Oil’s loopholes
  • $4 billion: Cost of Big Oil tax breaks in 2011.
  • $2 billion: Cost of Big Oil tax breaks eliminated by S. 940.
  • $77 billion: Cost of Big Oil tax breaks from 2011 to 2021.

Big Oil profits pile up

  • $902 billion: Total profits for the five biggest oil companies in the United States, 2001-2010 (in 2011 dollars).
  • $32 billion: Total Big Oil earnings, first quarter of 2011. Exxon Mobil alone accounted for $10.7 billion of that figure.
  • 38 percent: Big Oil’s first-quarter-2011 profit increase over the first quarter of 2010.
  • 28 percent: Increase in gasoline prices compared to 2010.
  • 53 percent: Portion of their profits that both Exxon Mobil and ConocoPhillips spent repurchasing stock to drive up their companies’ share values in the first quarter of 2011.
  • $8 billion: The amount of first-quarter profits the big five companies spent on stock buybacks.

Low effective tax rates for Exxon Mobil

  • 17.6 percent: Average effective federal corporate tax rate paid by Exxon Mobil, 2008-2010.
  • 20.4 percent: Average American individual federal effective tax rate in 2007 (the last year of available data).

Oil campaign cash and votes to close loopholes

  • $273,500: Big Oil campaign contributions to Republican senators and representatives in the first quarter of 2011.
  • $7,000: Big Oil campaign contributions to Democratic senators and representatives in the first quarter of 2011.
  • 2: House Republicans who voted to cut tax loopholes for Big Oil during debate on H.R. 1230.
  • 147: House Democrats who voted to cut tax loopholes for Big Oil during debate on H.R. 1230.
  • 0: House Democrats who voted for $30 billion in Medicare cuts in the FY 2012 budget resolution that was passed by the House on April 15.
  • 4: Republicans who voted against $30 billion in Medicare cuts in the FY 2012 budget.
  • 44: Senators who voted to close Big Oil tax loopholes and use savings to offset health care costs.

Public supports ending tax breaks

What oil tax dollars could buy

  • $21 billion reduction in the federal budget deficit by enactment of the Close Big Oil Tax Loopholes Act (S. 940), which would close tax loopholes for the big five oil companies over the next 10 years.
  • $30 billion for Medicare if tax loopholes were eliminated for all Big Oil companies. This would offset the Medicare cuts in the fiscal year 2012 budget resolution that was passed by the House on April 15.
  • $1 billion could pay the salaries of 18,000 high school teachers earning an average of $55,000 per year.
  • $1 billion could pay for 251,000 Pell Grants to aspiring college students. These grants are essential to help these scholars pay for tuition, and averaged $3,984 apiece in 2011.

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