Friday, August 10, 2012

Those darn oil companies

Forbes: "ExxonMobil pays $3 in taxes for every $1 in profit."  Meanwhile, here in Massachusetts, Senate candidate Elizabeth Warren is continuing her "Empty Platitudes" tour with a new ad claiming that Washington is "sending" billions to the oil companies.  And by "sending billions" to the dreaded oil companies, Warren means that they're allowed to take the same tax deductions afforded to every business in America:
Technically speaking, the government allows tax deductions for oil companies, and most (but not all) of those are similar to the provisions that allow other businesses to write off the costs of doing business — only they’re specific to the oil-industry operations in this case.
One can certainly debate whether deductions are subsidies, but the president suggested rather clearly that the government is literally giving taxpayer money to oil companies. That’s not true, because the uncollected funds never counted as government revenue in the first place.
I beg to differ: when you have a President that says "you didn't build that" it's obvious that he's already counted your revenue as government property.


Nigel Tufnel said...

The 'they pay $3 for every $1' line is straight out of Exxon's PR team and involves fun with numbers. The guy at Forbes is just regurgitating it.

Every year lobbyists from many industries work hard to get tweaks to the tax code to benefit themselves. Fair enough. It's legal.

The result of this is a tangled tax code; and few companies actually pay the 35% corporate rate so often touted as a millstone around the neck of an economy that still manages, somehow, to be the biggest in the world.

A wise Viking once said that we'll need to cut spending and raise taxes (or increase revenue, or whatever makes you feel better). Bush opted to use the surplus he inherited to slash taxes while increasing spending. A small tax break for PR purposes, combined with paying down the debt while reigning in spending would have been the conservative and prudent thing to do.

Now we're in a budgetary mess that requires the Viking Pundit solution.

The oil companies are of course a natural target on the campaign trail, because they've become so huge that their industry-specific incentives end up taking billions of dollars out of the revenue stream. They are making record profits while working stiffs pay more at the pump and see their food prices going up.

We have to look at entitlement programs, etc., but we have to be looking at everything else. If rational discussion stops with a shout of 'taxes kill jobs' we will never solve this problem.

Eric said...

I don't disagree with my former self: I think it would be better to take a small bite out of spending, raise some taxes, reform entitlements and parcel out the pain over time.

Instead the trajectory is a $25 billion national debt (CBO) and, if I remember correctly, 100% of federal spending going to just Medicare, Social Security, and the national debt interest.

There's only one party, however, running ads of Paul Ryan pushing Grandma over a cliff whenever you raise this issue.

Nigel Tufnel said...

Anti-Ryan ads as an indictment of the Democrats? Don't go there, Vike. That's politics and there is no dearth of heinous analogs on the GOP side.

The GOP openly vowed to obstruct anything Obama tried to accomplish. They are not operating on some kind of moral high ground. The Democrats have responding by digging in their heels and using whatever options they have to plow through their agenda.

We can ignore what led up to the current situation and accurately observe that the Democrats are digging in their heels, but that doesn't tell the story.

The rhetoric has been and always will be there. Now we need leaders to stand up and legitimately and sincerely look for ways to work across the aisle for the good of the country.

The harder the GOP works to satisfy 'the base', the worse the situation will get.

Eric said...

Yes, the Republicans vowed to obstruct anything Obama tried to "accomplish" and the American people punished them with the largest midterm election swing since 1938.

In response to this "shellacking" Obama moderated his politics not one bit. But, darn it, the GOP should compromise.

Speaking of heinous ads, remember when Dubya was all but accused of dragging James Byrd behind a pickup truck? I await your long list of GOP-sponsored ads accusing Democrats of murder.

Nigel Tufnel said...


Putting the word 'accomplish' in quotes doesn't negate the point. The Republicans are on record as having said they would not let Obama win anything.

The biggest item, health care, is a re-tread of Bob Dole's plan, which was crafted to have bipartisan support. When Wild Bill beat Dole and tried to implement Dole's plan, the GOP suddenly saw the light and decided to ignore their previous positions and the AEI and Heritage Foundation recommendations, by declaring that universal health care would wreck our economy and our society. Romney instituted the same plan here in the Bay State and we are up to 98% coverage and have one of lower unemployment rates in the country. Mitt pretends the whole thing never happened, because he has to toe the obstructionist line. Obama recognized that he was not dealing with ideology, but with politics, and pushed on where Clinton caved.

The link between the congressional mid-terms and public opinion of Obama is wishful thinking. It is more meaningful to note that public opinion of Congress has been on a steady decline since the economic collapse, and the turnover was a reflection of that negative public opinion. Now, with the GOP in control of the House, public opinion is as low as it's ever been. You accuse Obama of not having moderated his politics, while progressives are frustrated with him because he isn't pushing the hard left agenda. If he's pissing off the hard left and the hard right he's probably on the correct path.

The words '...all but accused...' are used to make a leap to a falsehood. The Byrd ad was slimey, but it didn't accuse Bush the Younger of murder. To get back to the point that both sides run crappy ads during campaigns: consider the Willie Horton ads, accusing war hero Max Cleland of being soft, the swift boat campaign, 'death panels', etc. Campaigners will even turn on their own: recall the whisper campaign run in South Carolina to accuse McCain of having fathered an illegitimate black child.

Times change said...

How come Viking Pundit doesn't do any more posts blasting politicians for blocking "up or down" votes for stalled judicial nominees?

Eric said...

That's a curious remembrance of the midterm election. This was the aftermath of the permanently unpopular Obamacare, a trillion-dollar stimulus that didn't stimulate, and ten thousand "Republicans drinking Slurpees" speeches. Instead, Americans said: "please stop this guy."

As for judicial nominees, I've adopted the position of Senator Obama and the New York Times editorial page (2001-2008 only).

Anonymous said...

Don't worry, someday that tactic will become wrong all over again. Not after this election, obviously, but someday.