Friday, January 19, 2007

US House repeals 'Big Oil' tax breaks

Late in 2005, with gas prices soaring, there was talk of a windfall tax on the large oil companies, who were profiting from increased prices due to the hurricanes which hit the US Gulf Coast. I'm not generally in favor of singling out particular companies and taxing them, or imposing requirements on them.

However, Big Oil has had unprecedented political access to this administration. They got a lot of tax breaks which they should not have got in the first place. Also, they have had an unprecedented effect on influencing energy and environmental policy to their favor. In both cases, their gains come at the disadvantage of most other Americans, and indirectly, the rest of the world (in the latter case).

The US House of Representatives has, praise God, rolled back some of the tax breaks, and raised drilling royalties. This will generate $14 billion over 10 years. We cannot have the poor subsidizing the rich, which is what happened when Bush cut welfare services but pushed tax breaks for the wealthy. Free-market capitalism operates on the premise that when you go into business, you pay your money and you take your chances. What we have instead is that ordinary Americans subsidize large companies, even when they're not in financial trouble, or worse, when they're doing well. We need to start playing by our own rules.

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