If you were to ask the man in the street if we should give subsidies to very wealthy oil companies, the overwhelming response would be a loud "No!". But if we peel back the curtain and look closer at this issue, we most likely will come away with a different opinion. First of all, most of the stockholders (owners) are from the middle class....many of whom are in union pension funds.
But what specifically are these subsidies? First of all, many "tax breaks" are not subsidies at all but rather accounting devices like depreciation of expensive equipment which lower taxes. These are the same "subsidies" that all companies, large and small, use. But of the true subsidies, in dollar terms, what did they amount to? In 2010 the total was $4.5 billion. Of that a little over $1 billion went to the Strategic Oil Reserve which is designed to protect the country from prolonged oil shortages. The second is tax exemptions for farm oil subsides which comes to another $1 billion. The 3rd is roughly $570 million for Low Income Home Energy Assistance. Those 3 programs account for $2.6 billion of the subsidies.
Most of the remaining "subsidy" is from section 199 of the IRS Tax Code. It is a credit to encourage manufacturing in the US rather than out of country. Microsoft and Apple take advantage of the same credit. This protects jobs and few would lobby to take it away.
In short, if we are to have an adult conversation on this issue, we need more than emotional political talking points. My hope is that for those that may have been enlightened by this article that if you are presented with the question posed at the beginning of this article, that you will now respond with a "yes!".
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