JEC Report Shows Repealing Tax Breaks for Major Oil Co's will reduce Deficit not impact pump prices

[Bill USA]

http://jec.senate.gov/public/index.cfm?p=PressReleases&ContentRecord_id=039f1242-dc45-4078-8ebf-a02d80224a2d&ContentType_id=66d767ed-750b-43e8-b8cf-89524ad8a29e&Group_id=1a3081df-5769-4cc9-99e8-a0387a830c5f


Washington, DC – A new report by the U.S. Congress Joint Economic Committee (JEC) finds that eliminating or modifying several tax breaks currently benefiting the major integrated oil companies will reduce the deficit by $21 billion over ten years and encourage investments in alternative energy and energy efficiency.

The report, http://jec.senate.gov/public/index.cfm?a=Files.Serve&File_id=def3390e-c933-4420-a076-19f786cd3af0">“End Tax Breaks For Big Oil: Reduce the Federal Deficit Without Increasing Prices at the Pump,” further shows that the repeal of the tax breaks will not affect oil and gas production decisions in the near term and will have little or no impact on consumer energy prices in the immediate future.

“This new JEC report makes clear that there are ways to bring down the deficit without harming our economic recovery,” said JEC Chairman Bob Casey (D-PA). “By repealing unnecessary tax breaks to the major integrated oil companies, we can reduce the deficit by more than $20 billion and speed the move to a clean energy economy without impacting prices at the pump.”

The price for crude oil, which is the key driver of gasoline prices, is determined in a global market based on global supply and demand. While the United States consumes nearly a quarter of all oil consumed worldwide, it has only 2 percent of the world’s proven oil reserves. The report finds, therefore, that increases in U.S. oil production are unlikely to lead to lower crude oil prices or gasoline prices.

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The tax provisions discussed in the report include: (1) eliminating the ability to claim the domestic manufacturing deduction (Section 199) against income derived from the production of oil and gas; (2) repealing expensing of intangible drilling costs; (3) repealing expensing of costs of tertiary injectants used as part of a tertiary recovery method; and (4) modifying the foreign tax credit rules for dual capacity earners.

[Andy823]

1. No it won't lower pump prices

The only thing that will do that is when congress stops the speculation in the market! As long as wall street can manipulate prices they will and as long as congress allows them to the prices will not come down!

Prices are really NOT determined by REAL supply and demand, but by GREED!

[Tippy]

2. Gas prices here jumped ten cents a gallon since yesterday.....

[Bill USA]

3. you are precisely right. There is continuing to be huge amounts of money being put into speculating

on many commodities (including, believe it or not, farm commodities). Since the oil companies price their gas based on the latest prices paid on the exchanges (so that the spot prices are affected by the futures prices - where all the speculation is going on) they are enjoying speculative gains on the gasoline they sell.

I think these gains (over what the historical prices (i.e. actual prices paid) are) should be treated as short term capital gains. These revenues are extraordinary income. They should NOT be treated as normal operating income.

[Warpy]

4. Those tax breaks are chump change to oil giants

although they'll squander the whole amount on lobbyists all screaming to keep them. Once they're overturned, the lobbyists will no longer be benefiting from their largesse, but there are always other battles to fight against the people.

In other words, they won't miss them and the government needs the money.

(FWIW, I am supported in large park by oil stock and I sincerely doubt it will affect me, either. That money is simply squandered like all "found money" tends to be)