- We have a massive budget deficit - a large portion of it due to a) huge and enduring annual expenditures to fight wars in the middle east to protect the supply of oil for our economy and b) a spectacular lack of tax revenue from big business, including big oil.
- Oil companies are reporting massive profits. Not revenue gains...profits. Check it out HERE and HERE.
- Prices for gasoline are at $4 a gallon and going higher - presenting a significant challenge to everyday Americans and certainly for our economy overall.
- Our Federal government provides oil companies tax breaks and tax payer funded subsidies.
- And now the House of Representatives, run by Republicans, is saying that it will not consider ending or reducing those subsidies. Further, we see indication that the Rs will pull out one of the oldest plays in their playbook - blaming the Ds for situations the Rs helped create.
The answer is...it's not.
The longer answer is...it's not right and the fact that these oil company subsidies were created in the first place, have been allowed to continue and now won't be repealed are all testament to who runs the government. Big Oil and their cousins Big Business and Wall Street run it. And guess what? Leaders in those sectors are more interested in massive quarterly profit margins to boost the value of the stock they hold and so they can earn big bonuses than they are in long term energy solutions that will help the economy overall.
With billions of dollars in profit coming in to oil companies on a quarterly basis for a sustained period of time, a large or even predominate portion of their profit should be used to invest in developing long term, next generation energy sources (wind, solar, other). And certainly, we the tax payers should not be subsidizing them if they do not do so.
But oil companies will not do the right thing unless they are forced to. They will. Not. Do. It. Why would they when then can rake in billions and billions of dollars every quarter? Why would they care that gas prices are going up? And what do they care about 10, 20 or 50 years into the future. Oil companies care about quarterly profit sheets - that's profit every three months. Talking about a decade from now to them is like talking about the year 2498. They won't change on their own. So, we have to make them.
I'm no economist, but I think the solution is obvious...cut all current public subsidies to oil companies and close tax loopholes that allow oil companies to skate out on much of or all of their fair share of taxes. Then, and ONLY then, come back to them with legislation that stipulates that for them to regain (new form) tax breaks or subsidies that they will have to invest a certain percentage of their profit margins in new energy development and show resluts against a set of aggressive timeframes and metrics.