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InsiderOnline Blog: November 2010

The Facts on Oil Industry Subsidies

PR-wise, it’s not the best time to be in the crude oil business. But, despite the Obama administration’s efforts to highlight tax breaks for the industry—tax breaks that all businesses receive—it’s just not true that oil industry lobbyists have captured U.S. energy policy. Scott Hodge runs down some facts in a new Tax Foundation report.

He points out, for example, that the United States actually provides far fewer subsidies to energy consumption than many other countries, especially other oil-producing countries. The United States is not among the top 25 subsidizers of energy in total dollars (including tax breaks), according to the International Energy Agency. And while the industry does receive about $2.8 billion annually in tax breaks, the green energy sector receives tax breaks amounting to $11.3 billion per year.

And let’s not forget taxes. Hodge writes:

Between 1981 and 2008, the oil industry paid more than $388 billion to the federal and state governments in corporate income taxes and almost twice that amount, $683 billion, to foreign governments.

Excise tax collections have grown steadily. Between 1981 and 2008, $1.1 trillion was collected in excise and sales taxes on petroleum products. In 1999 governments collected $59 billion, more than twice the industry’s net profits that year. In severance, property and so-called windfall profit taxes, the industry paid more than $472 billion over that 27-year period.

Posted on 11/23/10 03:21 PM by Alex Adrianson

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