[Congressional Record (Bound Edition), Volume 156 (2010), Part 8]
[Senate]
[Pages 10636-10638]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            TAX BREAK REPEAL

  Mr. SANDERS. Mr. President, I have a pending amendment to the tax 
extenders bill and want to say a few words on that.
  At a time when we have a recordbreaking $13 trillion national debt 
and an unsustainable Federal deficit, at a time when two out of every 
three corporations in America paid no Federal income taxes between 1998 
and 2005, at a time when ExxonMobil, the most profitable corporation in 
the history of the world, not only paid no Federal income taxes in 2009 
but actually got a $156 million refund from the IRS, at a time when we 
desperately need to end our dependence on fossil fuel and transform our 
energy system, the amendment I am offering, along with Senator Wyden, 
Senator Whitehouse, Senator Menendez, and Senator Lautenberg, is simple 
and straightforward.
  This amendment simply repeals over $35 billion in tax breaks to the 
oil and

[[Page 10637]]

gas industry, all of which were recommended for elimination in 
President Obama's fiscal year 2011 budget, which the Joint Committee on 
Taxation has estimated would raise over $35 billion in a 10-year 
period.
  To put this in perspective, the taxpayer dollars saved by repealing 
these tax breaks represents about 1 percent of the total projected 
revenue of the oil and gas industry over this same time period. In 
other words, the cost of repealing these tax breaks for the oil and gas 
industry is negligible.
  More than $25 billion of the money saved under this amendment would 
be used to reduce the deficit. I hear my friends coming down every day, 
appropriately, talking about our recordbreaking deficit and our huge 
national debt. Mr. President, $25 billion in this amendment is used for 
deficit reduction.
  Mr. President, $10 billion would be invested in the highly successful 
Energy Efficiency and Conservation Block Grant Program over a 5-year 
period, which would go to 50 States in this country to help them move 
forward in terms of energy efficiency and sustainable energy.
  This amendment has widespread support throughout this country from 
organizations representing millions of Americans, including the League 
of Conservation Voters, the Sierra Club, the American Council for an 
Energy Efficient Economy, Friends of the Earth, the Union of Concerned 
Scientists, Physicians for Social Responsibility, the American Public 
Health Association, moveon.org, Environment America, Oceana, 1 Sky, 
Greenpeace, Public Citizen, the Center for Biological Diversity, the 
Conservation Law Foundation, and 350.org.
  In addition, the Energy Efficiency and Conservation Block Grant 
funding this amendment would provide is strongly supported by the U.S. 
Conference of Mayors, the National League of Cities, the National 
Association of State Energy Officials, and the National Association of 
Development Organizations, and I am pleased to report that Taxpayers 
for Common Sense and the National Wildlife Federation strongly support 
repealing the oil and gas tax breaks this amendment would eliminate.
  Let me briefly explain why this amendment needs to be included in 
this overall legislation. First, there is no debate; everybody here 
understands we have to address the deficit crisis and the $13 trillion 
national debt we face. Well, I say to my friends: If you are serious 
about doing this and doing it in a way that doesn't decimate the middle 
class or working families, this amendment is a good step forward: $25 
billion in deficit reduction over a 10-year period is significant and 
it would help us address a major crisis.
  Secondly, we all understand--or I hope we all understand--we have to 
reform the Tax Code, which is grossly unfair today. We must make the 
Tax Code fairer and more equitable for ordinary Americans and, in my 
view, that means ending the absurdity of seeing large corporations, 
enormously profitable corporations, not pay their fair share of taxes 
and, in some cases, not paying any taxes at all. Each and every year, 
large and profitable corporations all over this country are able to 
avoid paying billions of dollars in Federal income taxes through 
loopholes in the Tax Code and generous tax breaks. This is simply 
unacceptable, it is unfair especially with a record-breaking deficit, 
it is very poor public policy, and it has to be changed.
  To highlight how absurd this situation has become, take a look at the 
August 2008 report on the subject by the Government Accountability 
Office or the GAO. According to this report--and I hope Americans hear 
this--two out of every three corporations in the United States paid no 
Federal income taxes from 1998 to 2005--two out of three. Amazingly 
these corporations had a combined $2.5 trillion in sales but paid no 
income taxes to the IRS. This statistic includes one out of four large 
corporations. That is according to the GAO.
  Further, according to a report from the Citizens for Tax Justice, 82 
Fortune 500 companies in America paid:

     zero or less in federal income taxes in at least one year 
     from 2001 to 2003.

  I am thinking now about working people in the State of Vermont and in 
the State of New Mexico or in Oklahoma, where people are making 10, 12 
bucks an hour; people are working 40, 50, 60 hours a week; people who 
are paying their fair share of taxes. Yet we end up having these large 
multinational corporations making billions of dollars every year in 
profits and then they avoid paying their fair share of taxes. That is 
an issue we have to address.
  This same report from Citizens for Tax Justice states:

       In the years they paid no income tax, these companies 
     earned $102 billion in U.S. profits.

  How is that? Not a bad deal: $102 billion in profits, zero income 
taxes.

       But instead of paying $35.6 billion in income taxes as the 
     statutory 35 percent corporate tax rate seems to require, 
     these companies generated so many excess tax breaks that they 
     received outright tax rebate checks from the U.S. Treasury, 
     totaling $12.6 billion.

  How is that? They make huge amounts of money, don't pay any taxes, 
and then Uncle Sam gives them a rebate. That is quite the scam.
  In other words, between 2001 and 2003, 82 of the largest, most 
profitable corporations in this country received a $12.6 billion tax 
refund--tax refund--from the IRS when, if they were paying their 35 
percent of corporate taxes as the law requires, they would have paid 
over $35 billion in taxes. That is a net loss to the U.S. Treasury of 
$48 billion.
  It is not just Bernie Sanders who has strong concerns about this 
issue. The issue of abusive corporate tax breaks has even gotten the 
attention of Forbes Magazine.
  Mr. INHOFE. Mr. President, will the Senator yield?
  Mr. SANDERS. I will yield in a few minutes and be happy to discuss 
this issue with my friend.
  Mr. INHOFE. Just one short question. Is the Senator talking about 
amendment No. 4318?
  Mr. SANDERS. I am, but not yet. I will get to that in a moment.
  Mr. INHOFE. OK.
  Mr. SANDERS. Mr. President, the issue of abusive corporate tax breaks 
has even gotten the attention of Forbes Magazine, which reported on 
April 1, 2010--this is Forbes Magazine--Forbes 500, dynamic capitalism, 
Forbes Magazine, and this is what they say on April 1, 2010:

       As you work on your taxes this month, here's something to 
     raise your hackles: Some of the world's biggest, most 
     profitable corporations enjoy a far lower tax rate than you 
     do--that is, if they pay taxes at all.

  Forbes Magazine. This is not one of the more progressive journals in 
America.
  So enough is enough. We can and must reduce the deficit in a way that 
does not harm the American middle class. Making sure that large and 
profitable corporations are not able to avoid paying taxes could 
significantly reduce the deficit. It is not the only thing we have to 
do, but it would be an important step forward.
  As a first step in this direction, the amendment I am proposing today 
goes after the three most generous tax breaks enjoyed by the oil and 
gas industry and would raise over $35 billion in revenue over a 10-year 
period--$35 billion, 10 years. All of these tax breaks were recommended 
for elimination in President Obama's fiscal year 2011 budget request.
  Specifically, this amendment eliminates the expensing of intangible 
drilling costs to raise over $10.9 billion. It eliminates percentage 
depletion for oil and gas while saving over $9.6 billion; and it 
eliminates the so-called manufacturing tax deduction for oil and gas 
production, saving over $14.7 billion over the next decade, according 
to the Joint Committee on Taxation.
  I want my colleagues to take a look at this chart, because what this 
chart tells us is that during the last 10 years, the five largest oil 
companies--ExxonMobil, Shell, BP, Chevron, Texaco, and ConocoPhillips--
earned over $750 billion in profits--10-year period, $750 billion, the 
top five oil companies. During the first quarter of this year, big 
oil's profits increased by 85 percent. Providing tax breaks to this 
profitable industry at a time of record-breaking

[[Page 10638]]

deficits simply does not make sense. We can't afford to do it.
  Let me give one example of the absurdity of continuing to provide tax 
breaks to the oil and gas industry. I want my colleagues to take a look 
at this chart right here. As we all know, ExxonMobil was the most 
profitable corporation in the history of the world from 2006 through 
2008, making $40 billion in profits in 2006, $41 billion in 2007, and 
$45 billion in 2008. Not bad. These profits, among other things, 
enabled Exxon to provide a $398 million retirement package to its 
former CEO, Lee Raymond.
  In 2009, one of the most economically difficult years since the Great 
Depression--millions of people losing their jobs, their homes, their 
savings--ExxonMobil was still able to make $19 billion in profits in 
the midst of a severe recession.
  I have a question for my friends on both sides of the aisle to 
consider: Out of that $19 billion profit, how much did ExxonMobil pay 
in taxes to the IRS? How much did they pay? How many billions of 
dollars? How many hundreds of millions of dollars did they pay? Well, 
the answer is: Zero, not one red nickel.
  So all over America, working families are struggling to keep their 
heads above water. They pay their taxes. Yet we have a corporation, the 
most profitable in the history of the country, that last year made $19 
billion in profit, and they didn't pay a nickel in taxes.
  But that is not, as they say, the whole story. It gets worse than 
that.
  As this chart right here on my right shows, ExxonMobil reported to 
the SEC that not only did it avoid paying any Federal income taxes, it 
actually received a $156 million refund from the IRS. Twenty-two 
percent of the children in this country live in poverty. We have 
record-breaking deficits. We have a $13 trillion national debt, and 
ExxonMobil receives $156 million in a tax refund after making $19 
billion in profits. This has to stop.
  This amendment I am offering would begin to make sure that ExxonMobil 
pays at least a minimal amount of their record-breaking profits in 
taxes to the Federal Government. That is the very least we can do.
  But ExxonMobil is not the only corporation enjoying these tax breaks. 
Chevron, the fourth most profitable oil company in America, a company 
that made a $10 billion profit last year when other companies were 
fighting to stay alive, reported to the SEC that it received a $19 
million refund from the IRS. This is Chevron. I know. It is not as much 
as ExxonMobil, but a $19 million refund after you make $10 billion in 
profits, that is not too shabby.
  Valero Energy, the 25th largest company in America with $68 billion 
in sales last year, received a $157 million refund check from the IRS, 
and over the past 3 years it received a $134 million tax break from the 
oil and gas manufacturing tax deduction that this amendment seeks to 
eliminate. And on and on it goes. ConocoPhillips, et cetera, et cetera.
  Let me very briefly turn to what this amendment would do with the 
revenues. In terms of deficit reduction, as I have indicated, the 
benefits are substantial. As we all know, the underlying bill we are 
debating today, which I support, would increase the deficit by about 
$87 billion over 10 years. This amendment, my amendment, would cut that 
by about a third--$25 billion over 10 years. This amendment importantly 
would also invest $10 billion into the Energy Efficiency and 
Conservation Block Grant Program which, as I mentioned earlier, will 
create jobs, save people money on their fuel bills, and help transform 
our energy system away from fossil fuels.
  I get a little bit tired of hearing my friends come to the floor of 
the Senate talking about the need to reduce our deficit. I get a little 
bit tired of people talking about the need for equity. If we cannot 
address a situation where some of the most profitable corporations in 
America pay zero Federal taxes and, in fact, get a tax rebate, then I 
am not quite sure what this institution is doing.
  So we now have an opportunity to move forward, to address our deficit 
crisis. We have an opportunity to move forward to transform our energy 
system. We have an opportunity in this amendment to create jobs and 
break our dependency on fossil fuel.
  I ask unanimous consent that the Senate now proceed to a debate on 
amendment No. 4318; that the time for such debate be limited to half an 
hour equally divided; that once the time has expired on this debate, 
the Senate proceed to a vote on amendment No. 4318.
  The PRESIDING OFFICER. Is there objection?
  Mr. INHOFE. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. SANDERS. Mr. President, I hear my friend's objection. I think 
that is unfortunate. The American people should be able to have a 
different vote and debate on this issue. But I hear what the Senator 
has said.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. INHOFE. Mr. President, I think the regular order is to go out 
now. First, I suggest that I will want some time this afternoon to 
explain what this amendment really does and also to explain in some 
detail the marginal wells this would affect. The average marginal well 
in my State of Oklahoma is 2 barrels a day. We are not talking about 
giants here. This is a totally different situation. We will have an 
opportunity to pursue that after resuming the regular order.

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