Last night in his speech before the joint session of Congress, President Obama asked this important question:
“Should we keep tax loopholes for oil companies? Or should we use that money to give small business owners a tax credit when they hire new workers?”
The stakes are significant. The multi-national oil companies receive more than $4 billion in tax breaks every year from the United States, according to The New York Times.
And of course international companies like Exxon, BP, and Shell spend hundreds of millions of dollars on lobbyists and political campaigns in the United States to ensure that they keep those American tax breaks.
Earlier this year, President Obama tried to reduce the tax breaks handed out to oil multinationals, but Congress refused to consider it in this spring’s budget talks.
And all the while, oil companies continued to spend some of their record profits on perpetrating the falsehood that Americans need them to keep drilling in the American ocean and the American Arctic in order to save us money at the pump.
I’ve said it before, and I’ll repeat it. Increased domestic drilling will have little to no effect on your gas prices, because the price of oil is set on the international market. Surging international demand, or reductions in international production, has a much bigger effect on your gas prices than do slow and incremental changes in domestic production.
Moreover, when we expand domestic drilling and allow hazardous actions like BP took last year in the deep waters of the Gulf of Mexico, we take all the environmental risk at home, but share any oil finds with the international market. Does that seem smart to you?
The international oil companies want Americans to believe that if we let them drill enough, and give them big enough tax breaks, the American price of gas will drop. The facts show that’s not true.
Offering oil companies tax breaks in the hopes they’ll lower your gas price is like offering your teenager a bigger allowance in the hope they’ll take smaller portions at dinner.