Sen. Jack Reed, D-R.I. and Sen. Robert Menendez, D-N.J. are introducing legislation that would repeal government subsidies that are given to large oil companies via large tax loopholes and tax breaks.
In a statement, Reed said that eliminating these tax breaks would harvest an estimated $22 billion over 10 years that would be applied to reducing the federal deficit.
``These subsidies aren’t targeted tax cuts, they are massive corporate giveaways to big oil companies,’’ said Reed.
Even though gas prices have dropped recently, Reed said that the big five oil companies remain quite profitable, raking in nearly $90 billion in profit last year.
The legislation would recoup tax money from such breaks as royalty payments for drilling in the Gulf of Mexico; closes loopholes in rules that oil companies use to avoid paying full corporate taxes in the United States; and limits the use of the oil and gas depletion allowances .
Reed’s proposals may make a lot of sense to his constituents in Rhode Island and the rest of New England and the northeast, but in a Senate controlled by Republicans, many from petroleum states, it is difficult to envision congressional approval of any of these measures in the near future.