America’s Most Obvious Tax Reform Idea: Kill the Oil and Gas Subsidies

In a world where $100-a-barrel oil is here to stay, there’s no need to pad the industry’s bottom line.

When Saudi Arabia’s longtime oil minister, Ali Al-Naimi, opens his mouth, the world listens. Yesterday, during a speech in Hong Kong, he delivered a message that U.S. policy makers in particular would do well to take note of. The days of $100-a-barrel crude, he told the crowd, are here “for the foreseeable future.”

If he’s right, one thing that shouldn’t be around for the foreseeable future are the outdated tax credits that protect oil and gas companies, which will be plenty profitable in a world of $100-a-barrel oil. If Democrats and Republicans are looking for safe ground to set up camp for the budget negotiations, let’s start with these $7 billion-a-yearsubsidies.

Exxon, Chevron Made $71 Billion Profit In 2012 As Consumers Paid Record Gas Prices

While 2012 might not be a banner year for Big Oil profits, it wasn’t a bad one either. With just BP left to announce 2012 earnings, Big Oil earned well over $100 billion in profits last year, while the companies benefit from continued taxpayer subsidies. Average gas prices also hit a record high last year, showing how a drilling boom may help oil companies’ profit margins, but not consumers’ wallets.

Read the full story at ThinkProgress.org