Oceans & Forests Blog

Will the Kochs #GiveItBack?

Posted Jul. 30, 2014 / Posted by: Lukas Ross

Earlier this month, billionaire siblings Charles and David Koch made it publicly clear that they hate subsidies of all kinds -- even the ones they benefit from as oil producers. Although it is refreshing to hear that even oilmen are now against oil subsidies, it would be even more refreshing if the Kochs were willing to lead by example -- that is, if the Kochs were willing to return their share of the billions that fossil fuel companies receive every year in government largesse.

That’s the message Friends of the Earth is sending today.

The controversy began this July when a mouthpiece for Koch Industries, Kochfacts.com, took umbrage with a League of Conservation Voters ad that aired in New Hampshire against Senate candidate Scott Brown, the Republican who won Ted Kennedy’s seat in 2009 and then lost to Elizabeth Warren in 2012.

“What are [the Koch brothers] doing in New Hampshire?” the ad asks. “Backing ads to elect Scott Brown…[who] voted to keep giving billions in special taxpayer funded subsidies to oil companies.”

This didn’t sit well with the Kochs. A representative of the longtime libertarians tersely replied that the brothers have been consistently against all forms of subsidies—for oil or anything else -- and that suggestions otherwise were “inaccurate and false.”

But for a family that claims to hate subsidies, the brothers have had their hands in some very strange pockets over the years. Both directly through corporate lobbying and indirectly through their vast political apparatus, the Kochs have sought to protect some of the most egregious giveaways on the books.

One of the worst is a tax break from 2004 that was designed to protect the manufacturing sector from outsourcing. Even though oil and gas producers are not really manufacturers and certainly not subject to the same outsourcing pressures, the deliberately broad statute allows them to claim a hefty deduction that is expected to cost taxpayers $17.3 billion over the next decade.

The tax break, which somehow manages to include software designers and movie producers as manufacturers as well, is everything small government conservatives are supposed to hate: a special interest goody-bag that distorts the market by privileging some industries over others.

None of that stopped Koch Industries from lobbying for the tax deduction and defending it in public. Even some of the organizations they fund are in on the action. Americans for Prosperity, the Tea Party-affiliated group that is widely seen as the Koch’s attack dog in Washington, has also publicly supported it, claiming that people who call for its repeal are simply against energy independence.

If the Kochs and their surrogates spent half as much time lobbying against fossil fuel subsidies as they did lobbying against renewables, the US might have a very different energy mix. As it stands, they are mum on the destructive role of government support for oil, and yet surprisingly articulate on the evils of government support for renewables. Hence the brothers’ ongoing war against things like the production tax credit for wind and state-level renewable energy portfolios.

There will always be plenty of room for progressives and the Kochs to argue—on everything from climate change to women’s health—but the allocation of billions to already profitable companies could become a rare area of agreement. The only thing Charles and David need to do is take one small step towards bridging some of their past actions supporting oil subsidies with their newly clarified public stance. All they need to do is give the money back.

According to Oil Change International, the oil and gas industry received $10.5 billion in federal subsidies in 2013. Koch Industries could tally up its share of the winnings and return them to the IRS.

Nothing would make a more powerful statement or silence their critics more quickly. Nothing would be quicker at dispelling the claim that they support crony capitalism and corporate welfare.

Photo via pixabay, Creative Commons

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