Even as Big Oil rakes in record profits while the American people face cuts to vital social programs amidst ballooning national debt, they have successfully defended their tax breaks. Tax subsidies to the oil industry go back to 1917, when intangible drilling costs were able to be fully deducted from a company’s expenses for tax purposes. In 1926, a write-off for cost depletion was introduced. That provision allowed oil companies to deduct costs based upon overall gross receipts and not just the actual value of the oil.
The American Coalition for Ethanol estimates that when combined with state and local government aid to large oil companies, subsidies amount to anywhere from $133.8 billion to $280.8 billion annually from all sources of taxpayer aid that goes to the oil and gas industry. Yes, they receive all of that from the American taxpayer while the top 3 oil companies profited $80 BILLION in 2011 ($200 million per day). The White House claims when gas goes up one cent per gallon, oil companies make $200 million more per month.
So how was Big Oil able to keep their tax subsidies at a time when they are taking in record profits and the government is drowning in debt? They bought politicians, of course! In a 51- 47 vote, 43 Senate Republicans and four Democrats filibustered to protect $24 billion in tax breaks for Big Oil.
- The 47 senators voting against the bill have received $23.6 million in career contributions from the oil and gas industry.
- Since 2011, Senate Republicans have voted seven times for pro-Big Oil interests and against clean energy three times.
- The oil industry spent over $146,000,000 on lobbying in 2011.