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Leaving aside that I am not a fan of “corporate welfare,” the tweet below from Senator Bernie Sanders demonstrates a lack of understanding about the oil industry and corporate finance. First of all, most oil and gas companies are not large corporations. Furthermore, many of them are filing for bankruptcy due to low oil and gas prices. And as they provide vital commodities whose prices are subject to wild swings, perhaps it is understandable that they receive some advantageous tax treatment. This Forbes article, for instance, refutes the myth of “rich” oil companies not paying their “fair share;” it’s also a few years old, but its points remain valid.
62% of Americans want to eliminate special tax breaks for fossil fuel companies. We've had enough of big oil getting rich on our dime.
— Bernie Sanders (@SenSanders) May 24, 2016
The more outlandish claim is that corporations “get rich.” Sanders doesn’t seem to understand that companies generally don’t just sit on their cash; they invest in capital expenditures and acquisitions, which usually results in additional American taxpayers being put to work. They also often pay dividends, which rewards American taxpayers with income.
But Sanders’s cartoonish understanding of the petroleum industry ensures that he doesn’t understand — or, more likely, doesn’t care — about these facts. In addition, he has an unrealistic view of the viability and capacity of alternative energies to provide our needs in the near future. His ideology leads him to demonize the goose that lays the golden eggs: an industry that provides us heat, light, power, transportation, plastics, paint, chemicals, and countless other things that make modern life possible.