Sanders Amendment Would Repeal Big Oil Tax Breaks

Sen. Bernie Sanders (I-Vt.) Wednesday proposed repealing more than $35 billion in oil and gas industry tax breaks.

Sanders says that his amendment would invest $10 billion of the savings in the Energy Efficiency and Conservation Block Grant Program, a Department of Energy program that energy efficiency and renewable energy projects at the state and local levels. The remaining $25 billion would reduce the federal deficit.

“What the amendment does is help transform our energy system away from fossil fuels, end unjustified tax breaks, cut the deficit and invest in energy efficiency,” Sanders says.

The billions of dollars in taxpayer-funded government subsidies that BP and the other big oil companies receive annually from the federal government have been drawing much more scrutiny as a result of the continuing Gulf Coast oil disaster.

The major oil companies receive their federal subsidies in addition to the billions of dollars in profits that they report each quarter.

Sanders is including his legislation to due away with oil tax breaks as a proposed amendment to the American Jobs and Closing Tax Loopholes Act, a bill that would close other corporate loopholes, among other provisions. The American Jobs and Closing Tax Loopholes Act (H.R. 4213) currently is being debated by the Senate.

Calling the tax breaks “absurd,” Sanders notes that Exxon Mobil, the most profitable corporation in history, last year avoided paying any federal income taxes and pocketed a $46 million refund from the IRS.

“This amendment would begin to make sure that Exxon Mobil, BP and other big oil companies pay at least a minimal amount of their record-breaking profits in taxes to the federal government,” Sanders says.

During the past decade, Sanders says, the five largest oil companies -- ExxonMobil, Shell, BP, ChevronTexaco, and ConocoPhillips -- earned more than $750 billion in profits. During the first quarter of this year, big oil's profits increased by 85 percent.

The chairman of the Senate Green Jobs and the New Economy Subcommittee, Sanders says that the United States heavily subsidizes oil but has failed to make significant investments in safer, cleaner renewable energy sources. He cites Environmental Law Institute data which finds that the U.S. from 2002 to 2008 provided more than $70 billion in fossil fuel subsidies, compared to only $12 billion for wind, solar, geothermal, biomass, and other renewable energy.

The senator notes that the oil and gas tax breaks also are targeted for elimination in President Obama's proposed federal budget for the 2011 fiscal year.

Key Republicans, however, have attacked Obama's plan to due away with the subsidies.

Sen. John Cornyn (R-Texas) opposes elimination of the tax breaks, claiming that they help small business.

“This amendment may not be easy to pass,” Sanders says, noting that oil industry campaign contributions since 1990 exceed $238 million.

“But it is the right thing to do for deficit reduction,” he adds. “It is the right thing for the environment, and it is the right thing to do for consumers.”

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