Saturday, March 31, 2012
Senate Upholds Big Oil Tax Breaks
Though I see where President Obama is coming from when he says that billions of dollars are going to the oil companies, but what would happen to gas prices if all these tax breaks were to be eliminated. We would see $5/gallon gas prices. I like the idea of going green and finding new renewable resources to power our nation, but that is not going to happen for a while and we should support oil companies as long as oil is such a huge component of the economy.
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5 comments:
I agree with John Felmy, API chief economist, that Obama should move away from importing oil from other countries and produce more oil in the United States. Additionally, more exploration and development in the United States would decrease the premium costs of oil for consumers. I think this would be the most ideal solution, especially since the bill to decrease high taxes on oil companies didn’t pass. Eventually, an ideal situation would be to both decrease the taxes on oil companies in the United States and to produce oil in the United States to decrease the prices of gasoline for consumers even more. We can only hope that this would be the case in the future.
While I don't think that oil companies need or deserve the tax breaks they get, I think that, if they were to be taken away, they would use that as an excuse to raise oil prices further. Still, the problem is not necessarily our dependence on foreign oil, but our dependence on oil in general. If there were more viable alternatives, the demand for oil would be more elastic, and oil companies could not charge such exorbitant fees.
For a short term, I agree that the government should continue to support the oil industry as there is no immediate solution for the existing problems. And for a long term, I support the idea of exploring/developing new/alternative energies as Oil is after all a limited resource. As discussed in the lecture of Environmental and Natural Resource Symposium 2012, the outlook of renewable energies is promising to a certain degree. Therefore, the government could invest in more money in the R&D of this field in the future. That is, what is in need is not a certain type of resource but a sustainable energy plan.
I agree with T.J that we are far too dependent on oil. Yes, tax breaks may be necessary to keep oil prices from sky-rocketing; however, we should not give them as much as we are. If we would endorse the research in renewable resources more, we could begin to move away from our intense dependency on oil.
I say let the price increase. Tax payers are already paying it in terms of their subsidies and tax breaks granted by government. Instead the difference is that subsidies allow a lower apparent price that consumers can feel more comfortable with instead of showing true demand for the good. If the real price became apparent, maybe there would be more incentive for people to contact their representative for alternative energy investment.
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