May 11, 2004
Senate Energy Tax Package Provides Needless Handouts to Oil Giants
Statement of Joan Claybrook, President of Public Citizen
The Senate is expected to vote on a corporate tax reform package that has $7 billion in corporate tax breaks, incorporated from the stalled energy bill, that benefit oil, gas, coal and nuclear companies. Most significantly, the legislation will do nothing to reduce gas prices, decrease consumption, or increase domestic energy production. If it passes, the biggest beneficiaries will be the oil giants – not consumers.
It is fiscally irresponsible to dole out $7 billion in tax cuts to energy corporations that are enjoying some of the largest profits in the U.S. economy. The tax package allocates $4.8 billion to oil corporations to provide various incentives for increased domestic drilling. Using taxpayer money to subsidize corporations such as ExxonMobil, ChevronTexaco, ConocoPhillips, BP and Shell, which together enjoyed after‑tax profits of $60 billion in 2003 alone, is ludicrous. It makes no sense to lend a helping hand to corporations that profit greatly from drilling for oil and natural gas in the United States, especially when high domestic prices for these energy commodities provide ample incentive to increase production.
The tax package would also expand the nuclear industry’s preferential tax breaks, inappropriately shifting nearly $1 billion in costs of decommissioning nuclear power plants from the nuclear industry to taxpayers. The bill grants corporations $1.7 billion to promote the use of coal for America’s electricity. This is a poor investment of taxpayer dollars because so-called “clean coal” is a failed technology – too dirty to deserve such a generous handout.
There is much to be done to shape a sound national energy policy. But giving tax breaks to wealthy corporations is not the right place to start.