WASHINGTON, Oct. 15 (UPI) -- The U.S. presidential candidates' disagreement on how to handle oil companies' taxes and profits reflects broader differences on energy, observers said.
Republican Sen. John McCain of Arizona wants to drop the top corporate income tax rate from 35 percent to 25 percent, which would save oil companies several billion dollars annually. Democratic Sen. Barack Obama of Illinois wants to impose a windfall profits tax on oil companies and use the money for tax rebates.
Each candidate opposes the other's plan. However, the Los Angeles Times says Obama and McCain do agree that some loopholes that allow oil companies to save several billions annually in taxes should be closed.
The disagreements reflect broader differences between Republicans and Democrats on energy policy. McCain supports lower taxes to encourage domestic exploration and promote energy independence. Obama backs higher taxes on the oil industry to help provide tax breaks for individuals and to promote renewable energy.
Given the size of the oil industry, tax breaks aren't that big but should be abolished because the industry is too profitable to need the breaks, investment banker Jeffrey Hooke told the Times.
ExxonMobil, which earned after-tax profits of $41 billion and paid $14.7 billion in income taxes worldwide in 2007, disagrees.
"If you increase taxes, you reduce the ... money we have available to invest in exploration," company spokesman Alan Jeffers said
