Oil execs defend federal tax breaks
From left, ConocoPhillips Executive Vice President John Lowe, Chevron Vice Chairman Peter Robertson, and BP America Chairman and President Robert Malone respond to questions while testifying before the House Select Energy Independence and Global Warming Committee on Capitol Hill on April 1, 2008.
TEXT OF STORY
Kai Ryssdal: Today it was executives from Big Oil in the hot seat. They were trying to defend billions of dollars worth of tax breaks -- tough any time, much harder when prices and industry profits are near record highs.
Marketplace's Jeremy Hobson has more.
Jeremy Hobson: Profits aside, it probably wasn't fun to be an oil executive today.
Democratic Congressman John Larson wanted to know what taxpayers are getting for their investment in oil companies -- $18 billion in tax breaks over 10 years.
John Larson: If I was one of your shareholders, I'd be saying, "You know, they're not doing a bad job; I'm getting a pretty good yield on my dollar here." But if I'm a citizen of this country, I'd be saying we're not making out so well here.
The industry argued that taking away the tax breaks would be unfair and that it actually pays more taxes than other industries. But really, if you're making $123 billion, why do you care about $1.8 billion in tax breaks a year?
Tyson Slocum: Even if you're a billionaire, you care about the last dollar that you just made.
Tyson Slocum directs the energy program at Public Citizen.
Slocum: $1.8 billion, sure. In a $3 trillion federal budget, it might be a small thing, but it would have real impact if it was invested wisely.
The tax break amounts to $6 per person in the country. Slocum says imagine if that money were used to install solar panels nationwide.
But Jerry Taylor at the CATO Institute points out that most of the tax breaks at issue are not oil and gas specific. They are given out across the manufacturing sector to encourage doing business domestically.
Jerry Taylor: I think there's a pretty good case for getting rid of that credit for everybody, but singling out the oil and gas companies simply distorts markets even further and probably doesn't lead to more efficient economic activity.
President Bush has threatened to veto any bill getting rid of the tax breaks, saying it would only make gas prices higher.
In Washington, I'm Jeremy Hobson for Marketplace.