A bill to repeal a $21 billion tax breaks to the oil industry failed in the U.S. Senate on Tuesday, despite both the Republicans and the Democrats being focused on reducing the federal deficit.
... despite overwhelming public support, the U.S. Senate has failed to pass the Close Big Oil Tax Loopholes Act (S. 940), which would have repealed tens of billions of dollars in tax breaks for oil and gas companies over the next decade, Public Citizen, a nonprofit consumer advocacy organization, said in a statement.
According to Bloomberg, three Democrats opposed the bill while two Republicans voted for it. The Democrats had argued that the oil companies can now afford to forego the tax breaks, which were spread over ten years as their combined first quarter profits topped $30 billion.
However, according to the Republicans, a repeal of tax breaks would result in higher oil prices and increased dependence on foreign sources of oil.
Public Citizen lambasted the Senate decision, saying some senators are siding with the big corporates which are siphoning off taxpayer money despite raking in multi-billion-dollar profits.
The big five oil companies – which in the last quarter racked up $36 billion in net profits – will continue to receive taxpayer money because many in the Senate have closer ties to those giant corporations than their own constituents, it said.
The Senate Majority Leader, Harry Reid, said he try to revive the proposal in budget talks with Republicans, according to Bloomberg.
Public Citizen pointed out that a recent report by the Congressional Research Service showed that repealing certain tax credits won’t affect gas prices at all. Since 2005, the largest five oil companies have spent nearly half a trillion dollars on stock buybacks and dividends. Clearly, they can afford to pay slightly more in corporate income taxes.
The statement also points out that the CEOs of the big five oil companies earn an average annual salary of $14.5 million and that oil companies shelled out a whopping $145 million last year on nearly 800 lobbyists.