Tax Break for Oil Companies

Introduction

From the research we found that, Obama administration favors this tax break with the intention to utilize these resources for a better purpose by allocating these funds for the welfare to society. According to Obama the tax break for oil companies is beneficial to the economy as it will result in the additional revenue generation which is going to be used for the benefit of society.

Argument: Why is it unbeneficial?

In this part of the paper I will be covering completely opposite opinion to the above statement which was given by Obama(United States Congress, 463 ).

What I belive is that the reason behind the tax break for oil companies is not beneficial to the economy because it is the only source used for generating profit for government expenses. The main use of this profit is for public of the country, and if this tax would have a break than government of United States would not be able to perform its activities effectively. It is clear that taxpayer money is not going to oil companies. However, companies are not paying as much in taxes because they get tax breaks on their exploration and development of domestic resources. So the real debate boils down to what the companies will do (or not do) on the domestic exploration and production side if the tax breaks for those activities are taken away.

According to the various critics, they often try to ignore these facts by saying the oil and gas industry receives 'subsidies', "But what they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry while leaving these same deductions in place for other sectors of the economy." We know that oil companies earn a lot of profit so, giving them tax breaks would result in the decrease in the money sully for the government because, It helps to improve the services provided by the state, such as education, roads, health and everything is in charge of the state(Shirin Akiner,1 ).

The next reason behind why I am not favoring tax breaks for oil companies is that because oil companies generate enormous profits and if they would be having tax benefits than it would be lightly unfair for the other companies and more over unemployment rate in the economy will be increased because, Setting the tax rate at 0% would be great for the oil companies, but then the government revenues would again be zero. Somewhere in between, the tax code is supposed to maximize the government revenue. The politicians with their eyes on these tax breaks only see higher revenues, while those defending the tax breaks argue that the impact may be higher gas prices and loss of jobs.

There is also apparently a large category of people who think that 1). Oil companies pay little in taxes, and/or 2). The reason for record oil company profits is the tax breaks they enjoy. In fact, we read a recent essay that claimed that ExxonMobil ...