More from Mr. Wallace's Sunday show.....

[witness23]

In case you missed this interview.

I get it......but for the love of God, how can you sit there and tell the American people that taking away subsidies are tax hikes? If you are not familiar with the phrase "corporate welfare", read this to understand what exactly it is.

Are you in favor of ending these subsidies to the profitable oil companies or should they keep them in place? Whatchya think?

Link: Kyl Defends Taxpayer Subsidies For Richest Oil Companies | ThinkProgress

Kyl Defends Taxpayer Subsidies For Richest Oil Companies
By Brad Johnson on Jun 26, 2011 at 4:52 pm

Appearing on Fox News Sunday with Chris Wallace, Sen. Jon Kyl (R-AZ) argued that budget talks should not include the reduction of oil and gas subsidies. Kyl, who abandoned budget negotiations with the White House this week, claimed that eliminating $2 billion in annual subsidies for the richest oil companies — instead of slashing programs that feed the poor and protect the middle class — would “hurt the American consumer”:

First of all, if you want gas prices to rise and pay more than $4 at the pump, go ahead and do this. That is not what we should be about right now. That kind of tax increase is going to flow right to the consumer. Everybody knows that. Secondly, you are picking out one industry in the United States, an industry that employs almost 10 million people, represents 7.5% of the Gross Domestic Product. You’re saying to them you are not going to get the same tax treatment that all other manufacturing corporations get in the United States. So we’re going to punish you, because you make a lot of money. It’s also true with those big profits, they have enormous costs of investment. Of course, you covered the issue of how much it costs to put one of those platforms out in the middle of Gulf of Mexico. Billions of dollars. Big money all the way around. You’ll hurt the American consumer if you impose more taxes on them.

You can click on the link above to watch the interview.

Appearing on Fox News Sunday with Chris Wallace, Sen. Jon Kyl (R-AZ) argued that budget talks should not include the reduction of oil and gas subsidies. Kyl, who abandoned budget negotiations with the White House this week, claimed that eliminating $2 billion in annual subsidies for the richest oil companies — instead of slashing programs that feed the poor and protect the middle class — would “hurt the American consumer”:

First of all, if you want gas prices to rise and pay more than $4 at the pump, go ahead and do this. That is not what we should be about right now. That kind of tax increase is going to flow right to the consumer. Everybody knows that. Secondly, you are picking out one industry in the United States, an industry that employs almost 10 million people, represents 7.5% of the Gross Domestic Product. You’re saying to them you are not going to get the same tax treatment that all other manufacturing corporations get in the United States. So we’re going to punish you, because you make a lot of money. It’s also true with those big profits, they have enormous costs of investment. Of course, you covered the issue of how much it costs to put one of those platforms out in the middle of Gulf of Mexico. Billions of dollars. Big money all the way around. You’ll hurt the American consumer if you impose more taxes on them.

Kyl is not telling the truth about oil and gas subsidies:

Eliminating Oil Subsidies Won’t Raise Gas Prices. Eliminating Big Oil’s subsidies would have very little effect on gas prices. The subsidies have little to no influence on the investment decisions oil companies make, especially with the price of oil around $100 a barrel. Instead, the tax breaks simply pad oil profits, and are funneled into “obscene” executive pay schemes and shareholder payoffs. Even the American Petroleum Institute, which opposes cutting the subsidies, has admitted that eliminating subsidies wouldn’t affect gas prices.

The Oil And Gas Industry Employs About 700,000 Americans, Not “Almost 10 Million”. A report prepared for the American Petroleum Institute in 2009 estimated the the oil and gas industry involves only 2.1 million direct jobs with 7.1 million indirect and induced jobs. But even the 2.1 million jobs figure is grossly inflated. According to the U.S. Bureau of Labor, oil and gas drilling — the industries directly affected by most of these subsidies — only employed 63,012 jobs in September 2009, the most recent reporting period. U.S. Department of Labor 2007 statistics indicate the drilling and production of oil and natural gas, plus support activities directly account for 425,025 jobs. If sectors such as oil refineries and natural gas distribution are included, even though they are unaffected by drilling subsidies, the total increases to 743,825 jobs. According to U.S. Bureau of Economic Analysis data from 2009, the drilling and production of oil and natural gas directly generates 799,100 jobs.

Taxes aren’t dollars that disappear, and the payment of taxes isn’t a punishment for successful businesses, like the oil industry that gets over $7 billion in subsidies a year, far more than the Obama administration has proposed cutting. Taxes paid go back into the American economy, supporting the long-term investments that make the United States the richest nation on earth.

For example, taxes support public universities like Arizona State, where Kyl earned his bachelor’s and law degree. Taxes pay for the electoral system that Kyl joined as a member of Congress in 1986, where he has been taxpayer-funded ever since. Then again, Kyl has also directly received $333,332 from the oil and gas industry in political contributions over his career. Maybe he is just concerned about protecting his own personal oil and gas subsidies, which he receives on top of his taxpayer salary.

 

[greg334]

Look witness, you are talking to some who don't get the political BS and propaganda used to fool them.

Right now the idea is that tax increases will hurt the economy and in different aspects they will but on the other hand tax incentives, grants to produce things that people won't buy and bailing companies out hurt more.

I don't see the rhetoric that people want to hear coming from people like Kyl or Boenher or anyone in the republican party for that matter. WHAT I do see is the same old people talking about the same old crap without the idea that many who have spoken up recently are fed up with all of it.

Tax incentives that the oil companies get can be offset by two very simple things - one is to streamline the permit process and the other is to lessen the degree of regulation from the states and EPA. IF they want to stop corporate welfare, lets stop paying them off by fixing the problems which caused them to get the money in the first place.

 

[witness23]

Look witness, you are talking to some who don't get the political BS and propaganda used to fool them.

I don't want to believe you greg, but when I see posts about the TSA and granny's soiled undergarments, I feel you just might be right. *sigh*

Right now the idea is that tax increases will hurt the economy and in different aspects they will but on the other hand tax incentives, grants to produce things that people won't buy and bailing companies out hurt more.

I'm not quite following you. Speaking only of oil subsidies, I don't see how you think that those are incentives to produce things the people do not want to buy? We have to buy oil. And I'm not sure why you included bailing out companies, I don't see the oil companies looking for bailouts, they are recording record profits. Just a little bit confused in your comments.

I don't see the rhetoric that people want to hear coming from people like Kyl or Boenher or anyone in the republican party for that matter.

I don't know of anyone that wants to hear more "rhetoric" coming from our politicians. Not quite sure what you mean here either.

WHAT I do see is the same old people talking about the same old crap without the idea that many who have spoken up recently are fed up with all of it.

Now this I understand where you are coming from and I couldn't agree more.

Tax incentives that the oil companies get can be offset by two very simple things - one is to streamline the permit process and the other is to lessen the degree of regulation from the states and EPA. IF they want to stop corporate welfare, lets stop paying them off by fixing the problems which caused them to get the money in the first place.

I think I get what you are saying, you tell me. You are essentially saying, let the oil companies drill more or at least make it easier so they can produce more, so they can make more in profits. If they were able to do that, they wouldn't need the subsidies?

For that to be true, there would have to be some truth that the oil companies aren't drilling or the permits aren't available. That is not the case. From what I can tell by this chart rigs producing crude oil are at all time highs. The bottom line, when an industry is making record profits, then maybe looking at stopping subsidies isn't such a bad idea.

You are kind of all over the place on this one, forgive me if I am not following along correctly.

 

[witness23]

I guess my problem with Senator Kyl is, what do subsidies have to do with taxes?

 

[clcooper]

when any industry is making record profits, then why are they getting any kind of subsidies . i guess that is the way it is to run a bussines . cry you need help because the govenment should bail out the bussiness. and not WE THE PEOPLE which is who the government is to protect , that is a free market

streamline the permit process . so should this be just only for the oil companies or for all companies ??

and the other is to lessen the degree of regulation from the states and EPA. hep lets lessen the regulations the oil companies have so we have to clean up more oil from the water and land . and the oil companies dont have to pay for the clean up just use tax money.

just like in Expediting the government bails out the companies so the Expediters can get more loads and less sitting ???

who should be getting any type of bail out ??

who should be paying taxes ?? who should be getting tax breaks ?? should it be bussines or WE THE PEOPLE . or should it be the illegal immagrents . or another country.

 

[greg334]

Witness, sorry about that, I have too many interuptions happening for the past week to think about things.

The point I'm trying to make is simple and based on a comment a CEO of a fortune 10 company made a while ago. It has to do with how the government, lobbiest and compaines play games with substidies and tax incentives. Here how it works;

When the company can do pretty much what they are there to do, in the case of the oil companies drill for oil and process it, they pretty much have no need for incentives or compensation.

The profits go to two things, one is research and development and the other is to the stockholders of the company. The first part is very important because that work provides jobs and will produce more money in the long run.

When the government gets involved, like allowing states to regulate off shore production, which is not really their right to do so, it puts the oil companies in a position that they can not create revenue through their business, which is drilling for oil.

With that loss of revenue, these oil companies take a different approach to things and lobby for compensation for those losses so they can do their R&D.

The incentive or subsidies are then created to make things equal for the companies to compete and to create jobs.

As mentioned, their 'record' profits are part of the problem but it seems that no one wants to put it in perspective to what those profits actually mean and how they are derived. It may be a case with their volume of business (remember every sale is part of that volume), their profit margin is lower than many industries but they make that up with the volume.

ALSO streamlining the process means more jobs. getting the EPA reined in means more jobs. We have an oil industry that is the cleanest in the world, and has been for a few decades. There may be issues with some things but we don't have the level of pollution that we would have if the industry was as bad as many make it out as.

With all of that said, the other industries that receive any form of subsidies should get zero. One glaring example is GM and the amount of money they get is so out of proportion to what they actually provide and we as tax payers (local, state and federal) will never ever see a return on the use of our tax money or return of the losses these counties and cities have ended up with through the forcing of subsidies.

 

[tbubster]

take that two billion dollars away and you dont think prices at the pump will go up.OIl subsidies started in 2005 under bush.they were included in a energy bill that bush signed on july 29 2005.yes republicans voted for it yes some wanted it.however so did many democrats like clinton,reid and this was one even Obama decided to do his job and vote voted yes for. let me guess they never taken any money from big oil right?
so what happens when they cut the subsidies after all when we are talking about spending trillions a year how much is 2 billion a year anyway.

 

[layoutshooter]

What subsidies? You mean a lower tax? That is NOT a subsidy. The government is NOT entitled to any companies OR private citizens earnings. It is NOT the governments money. Lower ALL taxes EXCEPT on those who pay none and insure that THEY pay THEIR share. They are the drain on the rest of us.

 

[greg334]

What subsidies? You mean a lower tax? That is NOT a subsidy. The government is NOT entitled to any companies OR private citizens earnings. It is NOT the governments money. Lower ALL taxes EXCEPT on those who pay none and insure that THEY pay THEIR share. They are the drain on the rest of us.

If you think so, then fight to get the 16th amendment repealed. BUT until then, they can directly tax the individual at the source of income or what ever they want.

 

[layoutshooter]

If you think so, then fight to get the 16th amendment repealed. BUT until then, they can directly tax the individual at the source of income or what ever they want.

I would without a doubt work to repeal the 16th and the 17th as well. Any government that feels it has a "right" to others wages is oppressive. We need a congress with some stones and a president who is not owned. It may be too late.

 

[Pilgrim]

The Oil And Gas Industry Employs About 700,000 Americans, Not “Almost 10 Million”. A report prepared for the American Petroleum Institute in 2009 estimated the the oil and gas industry involves only 2.1 million direct jobs with 7.1 million indirect and induced jobs. But even the 2.1 million jobs figure is grossly inflated. According to the U.S. Bureau of Labor, oil and gas drilling — the industries directly affected by most of these subsidies — only employed 63,012 jobs in September 2009, the most recent reporting period. U.S. Department of Labor 2007 statistics indicate the drilling and production of oil and natural gas, plus support activities directly account for 425,025 jobs. If sectors such as oil refineries and natural gas distribution are included, even though they are unaffected by drilling subsidies, the total increases to 743,825 jobs. According to U.S. Bureau of Economic Analysis data from 2009, the drilling and production of oil and natural gas directly generates 799,100 jobs.

From Energytomorrow.org (2010 figures):
Facts and Figures About the U.S. Oil and Natural Gas Industry
9.160 million Number of people directly and indirectly employed by the U.S. oil and natural gas industry.
$1 trillion Amount contributed to the national economy by the oil and natural gas industry.
$178 billion Amount paid to the U.S. government in rent, royalties and bonus payments from 1892 to 2009.
$95.6 billion Amount paid in 2008 U.S. income taxes alone.
$194 billion Amount invested to improve the environmental performance of its products, facilities and operations since 1990.
$58.4 billion Amount invested in low- and zero-carbon emission technologies from 2000 to 2008—more than either the federal government or all U.S.-based private industries combined.
Economy - Energy Tomorrow

Taxes aren’t dollars that disappear, and the payment of taxes isn’t a punishment for successful businesses, like the oil industry that gets over $7 billion in subsidies a year, far more than the Obama administration has proposed cutting. Taxes paid go back into the American economy, supporting the long-term investments that make the United States the richest nation on earth.

This has to be one of the most absurd paragraphs in the history of American journalism - especially the last sentence. Dollars that go to taxes are those that could have been used to make capital improvements, create new jobs and pay dividends to stockholders. Only a bleeding socialist would harbor the notion that taxes paid to the government go back into the economy; the fact is that nearly every penny of federal taxes is wasted by corrupt politicians on non-productive nonsense like welfare that shows zero return for dollars spent. Public universities are mostly supported by state funds and student tuition and fees.

Another misconception about the oil industry is the "record profits" that they seem to be making. This is true when taken in the context of number of dollars - and it's easily distorted considering the size and huge scale of these corporations. But compare their profit margins to those of other industries, and they're pretty average at 6.2%. Maybe Congress should be investigating "Big Brewers" (16.5%), "Big Lumber" (17.7%), or maybe "Big Publishing" (16.1%).
Source: Oil Industry Profit Margin Ranks Fairly Low: There Are Bigger Fish - Seeking Alpha

I guess my problem with Senator Kyl is, what do subsidies have to do with taxes?

My guess is that he's thinking of govt. subsidies as "negative taxation". However, if they decide to eliminate subsidies for oil companies let's also eliminate subsidies for some of the other industries on the above list as well. The first that comes to mind is tobacco - when used as directed it kills people. How about NPR? How about the automobile and housing industries? I'm in agreement that the US Govt has no business subsidizing private industry. But keep in mind that the oil and gas industry could be the ONLY large segment of our economy that's strong enough right now to be the bell cow that leads our country out of recession, especially if Obama is defeated next year and all their govt. restrictions are lifted to allow us to become energy independent.

Our politicians might want to reconsider screwing around with the oil industry - look what they did to housing.

 

[greg334]

I would without a doubt work to repeal the 16th and the 17th as well. Any government that feels it has a "right" to others wages is oppressive. We need a congress with some stones and a president who is not owned. It may be too late.

Then go ahead and start a Political Action Committee - I got my $5 sitting here waiting for you.