What’s an Oil Subsidy?
May 11, 2011
The authors, Loris and Dubay, note that President Obama wanted to end subsidies for oil companies by eliminating tax breaks, including accelerated depreciation options. But the oil industry already faces a higher tax rate than other businesses: 41% compares to 26%. Obama's intent to increase taxes even more on this industry would be costly for consumers. However, there are some subsidies of the industry that can and should be removed. They conclude that oil subsidies should be ended, but that oil companies should not be punished through taxation.