A good read by William O’Keefe on the differences between tax law for oil companies and corn-ethanol subsidies:
Not surprisingly, Democratic Leadership is attempting to parlay this vote into momentum to raise taxes on U.S. oil and gas companies. Though at first glance these measures appear to be similar, it’s really like comparing apples to … well, corn.
Ethanol industry receives actual, special subsidies to the tune of $5 billion annually, while Sen. Menendez et al are singling out the oil industry to repeal a tax deduction available to all U.S. industries.
One of the so-called “tax loopholes” under attack for our traditional energy sector is Section 199 — a tax credit designed to encourage domestic employment and made available to all firms operating in America’s manufacturing sector. The only thing special about the oil industry’s relationship to 199 is the fact that it can only utilize a 6 percent credit while all other sectors — from coffee roasters to music producers — can go to 9.
But envision for a moment that Sen. Menendez and the forty-five House Democrats, who are pressing Vice President Joe Biden to single out our oil and gas firms for a tax hike as part of the deficit-cutting deal, got their way. Would this measure fix our fiscal crisis? Not at all.
The rest here.