House Majority Leader Eric Cantor (R-Va.) today said that he could support eliminating subsidies for major oil companies "in a broader, broader sense" as part of a tax reform effort that would close loopholes while lowering overall rates.
Pressed by Fox News on the apparent support for a rollback of oil industry tax benefits that Speaker John Boehner (R-Ohio) offered Monday, Cantor sought to reboot the politically volatile debate by putting it in the context of corporate tax reform -- a top priority for both parties ahead of high-stakes spending and deficit talks.
Asked by Fox News if he supported "taking away the subsidies," as pitched by Democrats and President Obama, Cantor replied: "I support doing so in a broader, broader sense, OK?"
"I'm saying that the tax code, as it stands now, has failed," Cantor added. "We need to go about broadening the tax code, getting rid of loopholes, special interest loopholes. If you characterize this as that, fine."
The House Republican budget, which cleared the chamber with no Democratic support, would lower the top corporate tax rate to 25 percent and take aim at what the GOP document calls "perverse incentives" in the code. At the same time, the Obama administration is pursuing a tax reform proposal of its own that would bring the top corporate rate as low as 26 percent, according to a New York Times report this week.
Whether such a tax overhaul could win the support of U.S.-based oil companies -- which were taxed at an average global effective rate of 42 percent between 2006 and 2009, according to the Business Roundtable -- remains to be seen. That Cantor suggested he could support an end to industry tax subsidies via broader reform, however, may come as welcome news to negotiators seeking a deal to raise the federal debt ceiling while tackling the long-term deficit.
In his interview with Fox News, Cantor described "the problem" at the root of the oil-subsidy debate as the ability of "an individual industry ... to curry favor and get a preference in the tax code." He sounded a similar note earlier this month, decrying the current federal tax structure in an MSNBC interview that his office highlighted today.
"There are industries, sectors of this economy and individual companies that have benefited from the pressure they place on [Congress]," Cantor told MSNBC. "It's the ultimate in crony capitalism -- if you can gain an advantage in the system, you will do it to benefit your shareholders."
Meanwhile, Senate Democrats are preparing to call up a stand-alone vote on rolling back the tax benefits for major companies (see related story).
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