American president Barack Obama and other members of the Democratic Party routinely rail against “corporate welfare” and “subsidies” for the oil industry, but no such subsidies or welfare exist.
The president most recently singled out the oil industry in a debate with his Republican opponent, Mitt Romney. “The oil industry gets $4 billion a year in corporate welfare,” he claimed.
Now, does anybody think that ExxonMobil needs some extra money when they’re making money every time you go to the pump? Why wouldn’t we want to eliminate that?
Because that would put companies like ExxonMobil at a disadvantage.
Indeed, they already are.
The “corporate welfare” the president referred to are tax deductions and exemptions all American businesses can claim. The deductions allowed for oil and gas companies are actually lower than those for other manufacturers.
The president alleged that companies “can actually take a deduction for moving a plant overseas.” Romney said he had “no idea” what the Democrat was talking about. There is no such tax provision for building a plant overseas. American companies can extract the expenses of building a new plant from their taxes, but that is regardless of where it is built.
There is a tax provision for domestic industries and that’s the biggest tax break oil companies get. But it isn’t exclusive to oil companies. All businesses that make their products in America are allowed this deduction.
It hasn’t the stopped the president from claiming, as he did in March, that oil and gas companies take “billions a year in taxpayer subsidies.”
In April, he even instructed the Justice Department to investigate the possibility of price gouging, “so we can make sure no one’s being taken advantage of at the pump.”
There is no evidence oil companies are profiting off higher gasoline prices.
Gas prices have skyrocketed during Obama’s presidency, from an average of $1.83 per gallon when he took office to $3.80 this week. The unrest in the Middle East is responsible, but so is the Obama’s energy policy.
The president suspended deepwater drilling in the Gulf of Mexico in the summer of 2010 after the Deepwater Horizon oil spill and has refused to open more areas, in Alaska, off the Atlantic coastline, in Colorado and Wyoming, to drilling. These regions are estimated to hold over 200 billion barrels of oil that are recoverable with today’s technology. If developed, it would be enough to free America from the import of foreign oil for half a century.
Yet the president insists that “drilling alone cannot come close to meeting our long-term energy needs” and prefers to subsidize green energy companies; a form of actual corporate welfare he never talks negatively about.