Big oil is bagging big profits while Americans are lining up for $4 gasoline and Uncle Sam is looking for revenue to help curb a $1.5 trillion annual deficit spending habit.
Naturally, this brings up a discussion of whether all the tax breaks big oil companies get are necessary.
Having run through the list of deductions some folks in Washington want to take away from big oil, I would argue that some are overreaching. It’s only fair that a business should be able to write off its expenses as tax deductions. But other breaks the oil companies get beg for reconsideration.
For instance, when oil companies pay royalties to a foreign nation, they often classify those royalties like tax payments and seek tax credits. Royalties are not taxes. They’re payments to owners of mineral rights.
In any case, oil company executives brought before the Senate Finance Committee last week wouldn’t give an inch on anything. One of them even put out a press release calling pending tax proposals for Big Oil “Un-American.”
Click here to read my column in The Sunday Wall Street Journal.