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April 30, 2011

"Tax Breaks for Big Oil"

What are these, exactly? Because it sounds as if the government has given a huge break to this industry specifically, doesn't it? But nobody says what they are.

(I'm ignoring, for the moment, the stupidity of increasing the price of any commodity because we all know that price is passed on to the consumer.)

Every time prices increase (and often as a result of their friggin stupid policies such as shutting down drilling in the gulf, nixing pipelines and the GODDAMN MOSQUITO AND MOOSE RESERVE ANWR), we hear Democrats bang this "no more subsidies for big oil" drum like monkeys on crack.

Well what's a "big oil tax subsidy?" I know of one. Section 199.


IRS Code Section 199

SEC. 199. INCOME ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES.

(1) IN GENERAL- There shall be allowed as a deduction an amount equal to 9 percent of the lesser of--

(A) the qualified production activities income of the taxpayer for the taxable year, or

(B) taxable income (determined without regard to this section) for the taxable year.

This deduction was passed in 2004 as part of the American Jobs Creation Act of 2004, and is applicable to all domestic manufacturers.

Not just ExxonMobil and ChevronTexaco.

All. Domestic. Manufacturers. Companies that make soft drinks. Light bulbs. Bedding. Cigarettes. Booze. Condoms (see what I did there?)

Tupperware, Ford, Phillip Morris, Coca Cola and Louisville Slugger. Even Proctor and Gamble. Any company that makes something, here in the US qualifies for a deduction under Section 199. Even ethanol producers.

Except oil companies only get a 6% deduction.

Now, look, it's more complicated than I just described, there are limitations to the deduction that are related to W-2 wages for work performed specifically on the productive effort, the point is, a) it isn't just an oil company tax break and b) other manufacturers who are not filthy oil barons get more of it that the oil companies do.

So here's a suggestion. If you happen to be at a Town Hall, or some event where your duly elected representative to the United States Congress utters these words, walk up to the microphone, be polite, and ask that jackass "could you please explain just ONE of these tax subsidies for oil companies? Just one, that specifically favors them and no other industry"?

Have fun with it. Be playful. People like "playful."

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posted by Dave In Texas at 12:14 PM

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