Last night, a bipartisan majority of Senators voted to move forward on the Close Big Oil Tax Loopholes Act, a proposal to cut taxpayer handouts for the largest oil companies in the US. The procedural vote, which required a 60 vote threshold for passage, resulted in a 52-48 vote, falling mostly down party lines. Two Republican Senators, Olympia Snowe and Susan Collins, both of Maine, voted for the bill while three Democratic Senators, Ben Nelson (NE), Mary Landrieu (LA) and Mark Begich (AK), voted against the bill.
This bill called for a number of reductions in unnecessary subsidies for highly profitable oil companies including: modifications of foreign tax credit rules; limitations on deductions for domestic production (section 199); limitations on deduction for intangible drilling and development costs; limitations on percentage depletion allowances; and limitations on deduction for tertiary injectants. Repealing these tax breaks would have resulted in $21 billion in revenue over the next decade that would be used toward reducing the federal deficit.
While American families are struggling to pay high gas prices, they simply cannot afford to subsidize the country's most profitable oil companies. Reducing tax subsidies by $2 billion per year would have a negligible impact on these major oil companies that are on pace to make more than $125 billion in profits this year, but those savings could be put to much better use, including investments in clean energy and other efforts to free us from our dependence on oil. While the votes fell short this time, we are pleased that Senate Majority Leader Harry Reid (NV) has vowed to continue the battle to end tax handouts for big oil.