“At a time of high gas prices and massive oil industry profits,” Mr. Obama has renewed “his call to end the $4 billion-per-year subsidies for oil and gas companies and invest in clean energy.”
Let us remember that the heavy “subsidies” are actually the tax breaks they get at virtually every stage of the exploration and extraction process rather than cash the taxpayer hands them at the pump. It’s also worth remembering that the oil business just happens to invest more in “clean” energy than any other industry.
Americans consume about 322 billion gallons of crude oil each year. Some of that goes to plastics. Some goes up the smokestacks heating our homes and making electricity. And about half, 146 billion gallons, is gasoline.
Oil producers pay on the order of $90 billion in income taxes each year and, in fact, pay a higher percentage of their earnings in taxes than most other American corporations. Obama wants to take $4 billion more in taxes from them. That translates to around 1.4 cents per gallon of crude or, if you want to assess it all on gasoline, about 2.7 cents per gallon at the pump.
2.7 cents per gallon.
Speaking of the pump, We the Overtaxed People pay 18.4 cents per gallon in Federal tax on gasoline so that not-quite-3 cents is really coming from our driving.
Do you think Mr. Obama will drive the price at the pump down or up?
And do you really think Mr. Obama has an energy policy here or a political platform?
In the interests of full disclosure (regular readers know this), I do own ExxonMobil stock. I remain disappointed in their performance. I dislike subsidies but I despise political poseurs.