FOR IMMEDIATE RELEASE
Contact: Jeff Gohringer, 202-454-4573 or Jeff_Gohringer@lcv.org
WASHINGTON – At a recent campaign event in Plymouth, Massachusetts, Senator Scott Brown falsely claimed that “oil companies don’t get subsidies” and are only “able to take deductions like every other business.” The truth is that oil companies benefit from a whole host of industry-specific tax credits – or subsidies through the tax code – that do not apply to other manufacturers. It’s not surprising that Senator Brown would deny reality on this topic, having voted against repealing billions of dollars in taxpayer-funded subsidies to the nation’s most profitable oil companies.
“Scott Brown has been spending too much time in secret meetings with kings and queens and not enough time standing up to Big Oil,” said Navin Nayak, Senior Vice President of Campaigns at the League of Conservation Voters.
Last year, the League of Conservation Voters launched two television ads in Massachusetts highlighting Senator Brown’s voting record in Washington of putting corporate polluters ahead of public health.
Fact Check: “Oil Companies Don’t Get Subsidies.”
Nonpartisan Joint Committee on Taxation noted “industry specific incentives” for oil and gas. In a May 11, 2011 report, the nonpartisan Joint Committee on Taxation noted that oil companies benefit from a number of “industry specific incentives.” The report stated: “The Internal Revenue Code includes a number of tax provisions that provide favorable treatment to investment in oil and gas production projects. These incentives include the enhanced oil recovery credit, the marginal wells credit, the expensing of intangible drilling costs, the deduction for using tertiary injectants, the passive loss exemption for working interests in oil and gas properties, percentage depletion … In addition to these industry specific incentives, there are several provisions of general application that are particularly important to the oil and gas sector. These include the rules for dual capacity taxpayers and the last-in first-out method of accounting.” [Joint Committee on Taxation, “Description Of Present Law And Select Proposals Relating To The Oil And Gas Industry,” 5/11/11].
Experts say oil company tax credits are essentially the same as direct spending subsidies. In a May 5, 2011 article, the Center for American Progress noted: “[T]he tax code is stuffed with a host of subsidies for oil and gas. These subsidies are delivered through the tax code but they are essentially no different from government spending programs that provide money directly.” Additionally, citing nonpartisan organizations including the Tax Policy Center and Pew Charitable Trusts, Media Matters for America documented in an April 10 article that “experts say that [oil industry tax] incentives -- legally categorized as tax expenditures -- have effects similar to more direct cash transfers from the government.” The Tax Policy Center stated that “Tax expenditures operate essentially like direct expenditures, even though they appear as tax breaks.” Pew’s SubsidyScope.org website stated: “Tax expenditures have a similar effect on the federal deficit as government spending. They can also have effects on recipients that are similar to grants or other types of subsidies.” [Center for American Progress, 5/5/11; Media Matters for America, 4/10/12].
Prominent members of Scott Brown’s own party recognize that tax expenditures are subsidies. In a March 28 article, Think Progress documented that “Numerous Republican leaders have noted that a tax break is the same as a direct government [payment] or subsidy, in a different form. This includes President Ronald Reagan’s chief economic advisor, Martin Feldstein, former Senate Budget Committee Chair Pete Domenici (R-NM), House Ways and Means Committee Chair Dave Camp (R-MI), and Speaker of the House John Boehner (R-OH).” Think Progress included quotes for each of these Republicans in the article. [Think Progress, 3/28/12].
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