House Speaker John Boehner, R-Ohio, said on Thursday that he could support eliminating tax breaks, including those given to oil companies, if the revenue gained was coupled with a lower corporate tax rate.
“If we want to put Americans back to work, I think lowering the corporate tax rate is critically important. And to do that, I think we have to look at the tax-expenditure side—the deductions, credits, and other gimmicks that may be in the tax code that have accumulated over the last 30 years—as a way of finding which of those are appropriate, which aren’t, and using those savings in order to lower the corporate tax rate,” Boehner told reporters at his weekly press conference.
The speaker did not identify exactly which expenditures Congress should target, but he reiterated an earlier position that the billions in tax breaks given to oil companies could be part of that equation. "I believe that as we get in to looking at the fundamental reform of the corporate tax code, this and every other issue ought to be considered,” he said.
Boehner's comments come as executives from the Big Five oil companies are testifying on Capitol Hill about their tax breaks, which Democrats advocate eliminating and using the revenue to pay down the deficit. “I think it’s appalling and so do the American people,” Minority Leader Nancy Pelosi, D-Calif., said on Thursday.
“Why is the taxpayer having to pay, why are being asked to pay more so we can subsidize big oil when they are making record profits,” Pelosi asked , adding that the top five oil companies made over $30 billion in the first quarter this year.
Her comments reflect Democrats' attempt to co-opt the deficit issue from Republicans, who have led the charge in Congress to cut spending.
The comments were made also as officials from the top five oil companies testified in the Senate Finance Committee on a proposal from Senate Democrats to repeal oil company tax breaks.
Republicans contend that eliminating the tax breaks without an accompanying corporate rate decrease will only pass the cost on to the consumer at the pump. “If you start talking about corporate tax rates, understand this: Companies don’t pay taxes. Their customers pay taxes for them,” Boehner said. The issue is particularly sensitive as gas prices continue to climb ahead of the Memorial Day holiday, which typically kicks off Americans’ vacation travel.
Boehner would not comment on whether all revenue generated from the elimination of tax expenditures would have to be coupled with a rate decrease or else be considered a tax increase—a politically tricky question for the GOP. “I think we have to look at this in the context of lowering the corporate tax rate,” he responded.
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Humberto Sanchez contributed contributed to this article.
This article appears in the May 12, 2011 edition of National Journal Daily PM Update.
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