Oil Industry Tax Breaks
Gas Prices, Energy Production, and Economic Growth
Government assistance to the oil and gas industry dates back to 1916. That year, Congress passed legislation allowing oil companies to deduct 5 percent of sales from their taxable income to compensate for the declining value of their equipment. The Revenue Act of 1926 created two more incentives: the oil depletion allowance (allowing a deduction of a percentage of gross income for the depletion of exhaustible reserves) and the Foreign Tax Credit (allowing companies to offset taxes paid to other countries). These laws still exist, and over the decades have been supplmented with other incentives. The Obama Administration claims that…
