GOP's Austerity Budget Gives Big Oil a Free Ride
Tax receipts as a share of GDP
On Tuesday, House Budget Committee Chairman Paul Ryan (R-WI) plans to lay out his proposed budget for the next fiscal year. Promoting his plan on Fox News Sunday this morning, Ryan made clear that his plan for deficit reduction would demand drastic spending cuts shouldered on the backs of low- and middle-income Americans without asking for similar sacrifice from the wealthy. Asked repeatedly by host Chris Wallace whether he’ll eliminate tax breaks for oil companies, Ryan hemmed and hawed without giving a clear answer:
WALLACE: A lot of Democrats that are already saying, even before they’ve seen your budget, that you do all of this balancing of the budget on the spending side, and unlike the President’s debt commission, you don’t do it on the revenue side. Do you eliminate tax breaks? Do you bring in new revenue by eliminating, for instance, tax breaks for oil companies?
RYAN: We don’t have a tax problem. The problem with our deficit is not because Americans are taxed too little. The problem with our deficit is because Washington spends too much money. … So we’re not going to down the path of raising taxes on people. […]
WALLACE: But for instance, you will not eliminate tax breaks for Big Oil and Gas?
RYAN: Those are the kinds of details that we’ll come out later with, that the Ways and Means Committee will work on. We’re not going to go into the little details of which tax expenditure goes and which tax expenditure stays.
Ryan has no problem discussing details of his budget plan that impose higher taxes on 90 percent of Americans and relies squeezing Medicare and Medicaid. But when pressed on details about cutting corporate welfare, he had nothing to say. But previously, he’s been more blunt, calling the idea of ending taxpayer handouts to oil and gas companies “ridiculous economics.”
Ryan is wrong about one key point — there is, in fact, “a tax problem.” Federal tax receipts are at the lowest levels since 1950. As this graph produced by CAP’s Director for Tax and Budget Policy Michael Linden demonstrates, tax receipts as a percentage of GDP dropped precipitously following the Bush tax cuts [see figure above].
According to the Office of Management and Budget, corporate tax receipts will account for just 7.2% of federal revenues in 2010, with large corporations contributing less than one-sixth as much as small business and individual taxpayers to the federal treasury. Exxon-Mobil, for instance, paid $15 billion in taxes in 2009, but not a penny of those taxes went to the American Treasury. Because oil and gas companies receive generous tax subsidies, the U.S. government loses about $4 billion in revenue a year.
Paul Ryan’s budget will demand that working Americans give up health care and pension benefits that they’ve earned, while asking nothing from hugely profitable corporations that are failing to meet their tax responsibilities.
– Faiz Shakir, in a TP repost