Every American manufacturing company gets tax deductions that help it create jobs and strengthen our economy – whether it produces newspapers, furniture, cars or fuel. Eliminating those deductions would increase unemployment and further slow our nation’s desperately needed economic recovery.
Yet that is precisely what President Obama wants to do when oil companies want to use the deductions. It is one of many ways the Obama administration is undermining the oil industry and 9.2 million Americans whose jobs it supports. It is part of the administration’s strategy for replacing fossil fuels with heavily subsidized “alternatives” that taxpayers cannot afford, and consumers will not purchase on their own.
Newspapers that benefit from the same genre of tax deductions as oil companies nevertheless sometimes join attacking the oil industry, and the jobs and benefits it creates. This is rank hypocrisy.
“If Republicans are truly determined to slash the budget and end government waste,” the New York Times editorialized, “they will start [by] ending the web of tax breaks enjoyed by the rolling-in-dough oil industry and terminating the ethanol subsidy. Together these cuts would save up to $100 billion over 10 years.”
The Times is right about ending ethanol subsidies. But it and other “progressives” are wrong on every other argument they present to justify their job-killing, economy-crippling energy agenda.
1) Oil industry tax deductions cover costs incurred in exploration, drilling, production, transportation and refining. They aren’t subsidies or special tax breaks. They are essentially the same deductions claimed by all manufacturers, in conducting their business under our complex tax code. They ensure that businesses recover their costs and get taxed only on net income, in the process of making essential products.
Refineries and petrochemical manufacturers play an especially vital role in the oil industry – transforming crude oil and natural gas into fuels and raw materials used to make fabrics, plastics, pharmaceuticals, cosmetics, fertilizers, carpets, paints, roofing, siding, and myriad other products that improve and safeguard our lives. Solar panels and resins for fiberglass wind turbine blades are also petroleum-based.
The NY Times itself enjoys similar tax breaks, and hasn’t offered to give one of them up, to help end government waste. Nor have other newspapers, some of which have even sought to benefit under the “failing newspaper act,” which would let them operate as “educational nonprofits,” and pay no taxes. Others have sought exemptions from antitrust laws, so that they can set online subscription prices.
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