Two things drive me completely crazy about the debate over higher gas prices.
First, this whole issue of big oil subsidies is complete crap. The oil industry gets the same tax breaks as any other manufacturer. And why shouldn’t they? They manufacture a product here in the U.S.
I am stealing the following four paragraphs from the American Thinker blog (if I say that I am stealing it publicly, then it isn’t plagiarism, right?) because I think the author does a nice job of summing up what these tax credits are:
“Domestic manufacturing tax deduction — $1.7 B. This is a tax deduction given to every manufacturer in the US. Per CNN, it was “designed to keep factories in the United States.” If that deduction were eliminated for oil companies only, it would mean singling out oil companies from all other manufacturers.
Percentage depletion allowance — $1 B. Any industry can write down a portion of the cost of its capital equipment as part of the cost of doing business. Right now, oil in the ground is treated as capital equipment. Again, this “subsidy” amounts to how the cost of doing business is defined. All companies get it, not just oil companies.
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