Gas prices sit near $4 a gallon. And guess what? Oil execs are heading to Washington to testify before Congress.
Festivities start Thursday, when representatives of the 'big-five oil companies' will be questioned by the Senate Finance Committee.
Pushed by rising gas prices, Democratic lawmakers have ramped-up calls to end tax incentives that oil and gas companies don't need.
On Tuesday, lawmakers introduced legislation that specifically targets the big five. Dubbed the Close Big Oil Tax Loopholes Act, the bill would eliminate tax subsidies for the five largest oil companies and direct those savings to pay down the deficit.
The oil industry least deserves its raft of tax breaks. The biggest is the domestic-manufacturing tax deduction, which was passed in 2004 and designed to keep factories in the U.S. But where are those jobs?
The bill would also end write-offs on intangible drilling costs and prohibit companies from treating oil in the ground as capital equipment.
In total, the bill would result in savings of $21 billion over 10 years.
The oil industry and many of its supporters in Congress—mainly Republicans—have argued that the tax breaks encourage domestic oil production and provide jobs for millions of Americans. Any increase in taxes would be passed on to consumers, they say.
How much of this is political theater? Almost all of it.
Harry Reid, the top Democrat in the Senate, acknowledged as much.
"Let's make one thing clear: Wasteful subsidies have nothing to do with gas prices. These oil handouts have existed for decades. Prices have continued to rise," Reid said Tuesday.
