Going After Oil Subsidies -- And ALL Corporate Tax Breaks

Democrats looked like opportunists at Thursday's congressional hearings in which they bashed oil companies to score points with Americans angry at high gas prices and proposed eliminating tax breaks for those companies -- even as similar breaks go to a wide range of companies. The hearings seemed more like a political show trial of Big Oil than any kind of a real conversation about energy or the corporate tax code.

So what should Democrats and progressives be saying about oil subsidies?

For starters, repealing tax breaks for Big Oil -- which cost the U.S. Treasury over $4 billion annually -- should be the start of a broader campaign against all corporate tax loopholes. There is now wide agreement that these loopholes have gotten out of control. President Obama's fiscal commission urged that all such loopholes be eliminated and that the corporate tax rate also be lowered. That's a good idea and would mirror what tax reformers did in 1986: they closed corporate loopholes, lowered the top rate, and substantially raised the overall amount of tax revenue that the Treasury collected from corporations.

President Obama is gearing up to present his own corporate tax reform plan later this spring and that plan is also expected to close many loopholes. Democrats in Congress should make clear that they are merely getting started early with this important work, and that all of corporate America is in for the same treatment as Big Oil.

Democrats also need to offer a sharper critique of oil companies. Big Oil's sin is not that it is making high profits during hard times, since other companies are as well. Nor is it that they are responsible for high gas prices, which isn't the case.

No, the problem with oil companies is that they want to keep America hooked on their product and routinely use their political muscle to that end.

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