Tax Break for Oil Companies

The course of the study will be based on the tax breaks for oil companies and its positive impacts on the society as a whole. The tax break for oil companies is beneficial to the society as it will result in the additional revenue generation which is going to be used for the benefit of the society. Currently in United States of America oil companies are enjoying massive tax exemptions (Timothy, P-16). These tax exemptions are just creating an extra burden over the government who is already facing a debt crisis (Sullivan, p- 1). Recently the Obama administration has decided to go for tax break for the oil sector in order to curtail huge financial losses to the government in terms of revenue (tax) collection. The study will discuss the benefits of these tax breaks for oil companies (Harder, p-14). Currently the oil sector is liable to pay around 9% taxes while the other sector is obliged to pay around 35% tax.

The 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 the society. Currently the oil companies account for around $4 billion annually. Keeping in view the current financial condition of the American government the decision of tax break is a right one. The revenue generated for the tax break can be used for the development of infrastructure. One of the most important benefits to the society of this oil break will be the allocation of these funds to the other problems prevailing in society such as healthcare concerns, higher education, law and order situation, and other recreational activities for the society. The advantage of tax break at the domestic level is that "by the rise in fuel prices", the government will reap more profit and it will help out the government to balance the budget deficit and debt crisis.

In the short run, it might appear as a disadvantage but, in the long run, it will reap extensive benefits for society. After the tax break, on oil companies, the prices of oil will rise and, the companies will transfer this burden on the consumers. The higher prices of oil will shift the consumer towards the consumption of alternate environmental friendly and sustainable energy resources. For example, the use of Bio-fuels as an alternate for oil, Liquid bio-fuels, are products that are ...