Conservative media have criticized legislative proposals to roll back tax breaks for the largest oil companies by pushing the notion that doing so would mean “the price of gasoline and oil is going to go up,” as the Wall Street Journal's Stephen Moore put it.
The Washington Examiner also repeatedly asserted that the Congressional Research Service backed up their claim, pointing to a months-old CRS analysis of President Obama's proposed FY 2012 budget, which included provisions that are not in the current proposal.
However, energy experts contacted by Media Matters stated that cutting the tax incentives would have little to no effect on prices at the pump, given the scale of the world oil market. And now the Congressional Research Service itself has weighed in. The New York Times reports:
The nonpartisan research group predicted a negligible impact on the price of gasoline from eliminating a series of tax benefits. Responding to an inquiry from Senate Democrats, the service said that with the cost of oil over $100 per barrel, “prices are well in excess of costs and a small increase in taxes would be less likely to reduce oil output, and hence increase petroleum product (gasoline) prices.”
In a review of the five specific tax changes being advocated by Democrats, the research service also said that tightening the tax code would make a very small dent in the huge revenues of the industry and that the price of oil hinges on many other larger considerations.