January 16, 2014

Tax Tradeoff: Cures for Deadly Diseases OR Tax Breaks for Oil Wells?

By Jay Davis, Digital Director, Americans for Tax Fairness

Should taxpayers finance research to find more cures for deadly diseases, or subsidize Big Oil companies to find more oil?

Tradeoff_ResearchorOil (300x402) (2)

Leaders in Congress just negotiated a budget deal for this year that gives the National Institutes of Health a budget increase but still leaves its funding $714 million below its 2013 enacted level. The agency researches and develops cures for cancer, heart disease, diabetes and a slew of other conditions. The mindless, 5 percent across-the-board budget cuts in 2013 (known as the “sequester”) already forced the agency to drop 640 research projects – that’s 640 fewer chances for a lifesaving breakthrough.

Meanwhile, a special tax break lets big oil and gas companies take an immediate tax deduction for the costs of drilling new wells in the United States – which include wages, fuel, supplies and preparing the ground for drilling. Taking this deduction immediately, rather than spreading the deduction out over the life of the oil well, saves the companies money, but it costs the rest of us roughly $1 billion a year. President Obama has proposed getting rid of this tax break, but it’s been blocked because a handful of oil state Democrats team up with Republicans to keep this special-interest boondoggle in place.

Highly profitable oil companies don’t need another tax break — especially when it comes at the expense of finding new medical cures that save lives.