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Lloyd Chapman

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Where Is Obama's Windfall Profits Tax On the Oil and Gas Industry?

Posted: 02/16/2012 3:37 pm

During the 2008 presidential election, then-Senator Barack Obama called for a windfall profits tax on the oil industry to subsidize a $1,000 "emergency" rebate for consumers struggling with surging gas prices and made provocative statements regarding the cost of energy and its respective negative impact on American families.

On May 6, 2008, Obama stated, "It isn't right that oil companies are making record profits at a time when ordinary Americans are going into debt trying to pay rising energy costs. That's why we'll put a windfall profits tax on oil companies and use it to help... families pay their heating and cooling bills and reduce energy costs."

However, www.change.gov, which housed the Obama-Biden transition agenda, was cleansed of any mention of such a tax shortly after.

The promise was displayed prominently at the top of the "economy" section of Obama's campaign website. That same information was transferred to Obama's transition website, when it was launched on Thursday, November 6, 2008. However, the language regarding the windfall profits tax vanished on Saturday, November 8, 2008 in an unceremonious and abrupt manner.

What stunned me was that when I noticed this, I couldn't find any mention of it in the news, anywhere in the world. So, I wrote a press release that was quickly picked up by different media outlets, including a story in The Huffington Post that saw 3,500 comments. Much to my amazement, the story spread across the nation and even to newspapers in Europe, and that's how the world found out that Barack Obama had dropped his promise to institute a windfall profts tax on the oil and gas industry.

The American Small Business League was foremost in questioning why, with the election over, President-elect Obama was failing to justify the removal of the windfall profits tax from his tax plan and whether the sudden elimination of this issue was a further indication that large corporations were already demonstrating their ability to influence the Obama administration.

An unnamed aide from the Obama administration eventually responded in December 2008, that the promise was dropped due to falling gas prices.

Since then, gas prices have skyrocketed, and profits for the oil and gas industry are some of the highest of any corporations in history.

ExxonMobil, for example, received so much in federal subsidies during the Obama administration, that Citizens for Tax Justice released a 2011 report, finding that "Over the past two years, ExxonMobil reported $9,910 million in pretax U.S. profits. But it enjoyed so many tax subsidies that its federal income tax bill was only $39 million -- a tax rate of only 0.4 percent."

In fact, in 2009, Exxon Mobil paid no taxes at all to the U.S. federal government on domestic profits of nearly $2.6 billion by legally funneling its profits through wholly-owned subsidiaries in countries like the Cayman Islands and reinvesting earnings overseas. In 2011, Exxon Mobil made $41.1 billion in profits, equal to about $5 million an hour, and spent over $13 million on lobbying efforts. Exxon's current effective tax rate is 17.6 percent, lower than that for most Americans.

Since the U.S. government has decided to treat corporations as individuals, then corporations should be required to pay at least the same amount in taxes as the average American individual does.

If President Obama were the man we all thought he would be and keep his promises to bring down gas prices and look for new sources of revenue -- the companies making record profits without a windfall tax seems to me like a perfect place to start looking for new revenue.

The oil and gas industry has a stranglehold on Barack Obama and every member of Congress. This country could go into a depression we'd never recover from, oil and gas could continue to make record profits and gas prices could hit $10 bucks a gallon -- but you'd still never see legislation to curb the excessive profits from the oil and gas industry because of the money that the oil and gas industry throws around.

Watch any major news outlet for an hour and you'll see back-to-back ads from the American Petroleum Institute or similar oil and gas lobbyist. To watch their ads, you'd think they're the Red Cross. They act like they're all doing us a big favor, like a philanthropic organization. But when you see those ads, I want you to realize that the oil and gas industry is making the biggest record profits in history, gouging us at the pump, paying little to nothing in income tax -- and President Obama thinks that's great.

My advice to everyone: quit listening to what President Obama is saying and start watching what he is doing.

 

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