It's unclear when, or even if, U.S. Senate Majority Leader Harry Reid, D-Nev., will bring to the floor one or more bills that would rescind certain tax breaks oil companies receive, cleverly deemed "oil subsidies." But if he does, he won't be able to count on the support of fellow Democrat, Alaska U.S. Sen. Mark Begich.
Competing bills have been floating around the Senate these past months -- with sometimes muddled, sometimes outright support of House Speaker John Boehner and Rep. Paul Ryan, chairman of the U.S. House Budget Committee. However, Senate Democrats have yet to leverage that support to get them passed.
The current proposal would end a series of tax advantages that, if Congress acts, would add about $21 billion to the Treasury over the next 10 years. Among other things, one of the provisions under fire is a tax break that all manufacturers receive, including oil companies, for doing business in the United States.
The oil and gas industry currently pay about $85 million a day in taxes, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, according to the American Petroleum Institute. And it's wildly profitable. The largest five private oil companies recently reported $36 billion in first quarter 2011 profits.
Begich, along with a handful of other Democrats, mostly from oil producing states, say that increasing oil taxes increases the prices that consumers pay at the pump, and ultimately will do little or nothing to decrease the country's deficit.
"Let's stop the headline grabbing and get serious about our developing a plan to secure our energy future," Begich said in a prepared statement. "Getting rid of these incentives for domestic production won't decrease prices at the pump for our families and small businesses. Instead, it will discourage companies -- especially the independents -- from domestic investment and job creation."
Indeed, even those who most support the tax increase conclude that it wouldn't alleviate pain at the pump. Democratic House Natural Resources Committee staffers produced a report concluding that, among other things, repealing such tax breaks would "not impact gas prices for American consumers. Oil companies that receive tax subsidies pass on that benefit to their shareholders, not to consumers."
Alaska Republican U.S. Sen. Lisa Murkowski, as expected, doesn't support the tax bill.
"If you want to have a debate about tax policy and closing loopholes and the corporate tax rate, that would be one thing," Murkowski spokesman Robert Dillon said. "But to single out a particular industry and make it the boogeyman is counter-productive."
Contact Amanda Coyne at amanda(at)alaskadispatch.com