Friday, February 24, 2012

Obama Striving to Put an End to Oil Subsidies

President Obama's proposed 2013 budget seeks to end "unfair' oil subsidies. As evidenced by his State of the Union addresses in 2009, 2010,, 2011, and 2012, the President has repeatedly tried to put an end to oil subsidies.

Treasury Secretary Tim Geithner makes the point that unfair allocation of subsidies mean that some industries like oil and gas get a huge tax break while others do not.

"Right now, companies in some industries pay two or three times the effective tax rates as companies in other industries. For example, the effective tax rate on an investment in buildings or other structures by a manufacturing company might be twice as high as the rate that applies to an oil or gas company. These subsidies distort choices about where companies should invest, and they distort the allocation of capital."

The subsidies offered to the oil and gas industries are a fundamentally important issue for renewable sources of energy that are striving for grid parity. As the President said to students at the University of Miami, “It’s time to end taxpayer giveaways to an industry that has never been more profitable, double down on clean-energy industries that have never been more promising.”

For information on the environmental elements of the Obama budget click here.

© 2012, Richard Matthews. All rights reserved.

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