Menendez Questions BP's Need for Subsidies Following $5.6 Billion Quarter
Big Oil Tax Subsidies Should be Part of Balanced and Fair Approach to Reducing the Deficit
July 26, 2011
Washington - With today's news that BP reported $5.6 billion in profits in the second quarter today, US Senator Robert Menendez (D-NJ) author of the “Close Big Oil Tax Loopholes Act” and leader of efforts to ensure ending oil tax subsidies is part of any debt deal, released the following statement: The “Close Big Oil Tax Loopholes Act”, was supported by a bipartisan majority of Senators last month, but faces Republican leaders opposition to be part of the debt negotiations.
"BP's 'disappointing' quarter of only $5.6 billion in profits shows just how absurd their taxpayer subsidies are. Without them BP would have had to scrape by with just $5.5 billion in profits this quarter. Why some in Congress think BP deserves these extra profits but seniors do not deserve Medicare is beyond me. As the President said last night, we need a balanced approach to reducing the deficit."
The estimate of $5.5 billion in profits without subsidies, or $100 million less than the profits with subsidies, derives from the Senate Joint Committee on Taxation (JCT) analysis of the cost of these subsidies to taxpayers. The JCT estimates that the Big 5 oil companies combined would make an additional $21 billion in profits over the next ten years, or $2.1 billion per year, if the subsidies stay in place. The Big 5 oil companies have refused to state how much they receive in tax subsidies when asked in Congressional hearings. The estimate follows from assuming that each of the Big 5 oil companies makes about $420 million per year, or $105 million per quarter, in additional profits owing to taxpayer funded subsidies to the enormously profitable industry.
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