The "tax breaks for Big Oil" meme...

[The Hollywood NeoCon]

David in Texas over at AoSHQ nails it.

What are these, exactly? Because it sounds as if the government has given a huge break to this industry specifically, doesn't it? But nobody says what they are.

(I'm ignoring, for the moment, the stupidity of increasing the price of any commodity because we all know that price is passed on to the consumer.)

Every time prices increase (and often as a result of their friggin stupid policies such as shutting down drilling in the gulf, nixing pipelines and the ******* MOSQUITO AND MOOSE RESERVE ANWR), we hear Democrats bang this "no more subsidies for big oil" drum like monkeys on crack.

Well what's a "big oil tax subsidy?" I know of one. Section 199.

IRS Code Section 199

    SEC. 199. INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES.

    (1) IN GENERAL- There shall be allowed as a deduction an amount equal to 9 percent of the lesser of--

    (A) the qualified production activities income of the taxpayer for the taxable year, or

    (B) taxable income (determined without regard to this section) for the taxable year.

This deduction was passed in 2004 as part of the American Jobs Creation Act of 2004, and is applicable to all domestic manufacturers.

Not just ExxonMobil and ChevronTexaco.

All. Domestic. Manufacturers. Companies that make soft drinks. Light bulbs. Bedding. Cigarettes. Booze. Condoms (see what I did there?)

Tupperware, Ford, Phillip Morris, Coca Cola and Louisville Slugger. Even Proctor and Gamble. Any company that makes something, here in the US qualifies for a deduction under Section 199. Even ethanol producers.

Except oil companies only get a 6% deduction.

Now, look, it's more complicated than I just described, there are limitations to the deduction that are related to W-2 wages for work performed specifically on the productive effort, the point is, a) it isn't just an oil company tax break and b) other manufacturers who are not filthy oil barons get more of it that the oil companies do.

So here's a suggestion. If you happen to be at a Town Hall, or some event where your duly elected representative to the United States Congress utters these words, walk up to the microphone, be polite, and ask that jackass "could you please explain just ONE of these tax subsidies for oil companies? Just one, that specifically favors them and no other industry"?

Have fun with it. Be playful. People like "playful."

[DumbAss Tanker]

All in all it's stupid scapegoating.  They only get 4 billion in breaks?  Chicken feed in and industry that size, and also chicken feed in our frickin' nightmare of a Federal budget.

You are exactly right that oil companies and their shareholders won't feel any pain from ending the credits, subsidies, or whatever you choose to call them.  It will simply be passed along.  Anyone who says it won't due to competition apparently is too stupid to understand that foreign companies pay US income taxes on business they do here, the same as domestic ones (And yes, I saw an otherwise educated person saying that on TV this morning).

For that matter, raising prices to cover costs by just 4 billion will likely be lost in the price increase tsunami caused by Bernanke's destroy-the-dollar program which continues unabated since 'There is no inflation' anyway.  By the definition of 'Inflation' he uses for policy, there indeed isn't any since wages are not moving despite the unchecked rise of prices.  Just a hint Ben, but wages probably aren't going to rise, no matter how much things eventually cost, as long as unemployment keeps flirting with 9%.       

[Wineslob]

You are exactly right that oil companies and their shareholders won't feel any pain from ending the credits, subsidies, or whatever you choose to call them.  It will simply be passed along.

Guess what kiddies? BIG GOV. will see more tax income..................