Topic: Section 199

President Obama claims that new fuel standards will double vehicle efficiency and reduce dependence on foreign oil. He also targets $4 billion in "taxpayer-funded corporate welfare" for oil companies. The hosts argue that these are not special subsidies but rather "Section 199" tax breaks available to all U.S. manufacturers, including software and media companies, and accuse the president of misrepresenting the tax code.

During the presidential debate, Barack Obama and Mitt Romney sparred over a $2.8 billion tax break for oil companies. Adam Curry clarifies that this is actually a broad manufacturing deduction (Section 199) that applies to any company producing goods in the U.S., including Apple and film studios. He criticizes both candidates and the media for misrepresenting the law as a specific subsidy for "Big Oil."

An analysis of Senate Resolution 2204 reveals that the "repeal" of oil subsidies actually targets Section 199 of the Internal Revenue Code, which provides a 9% deduction for domestic production. The hosts point out that this deduction also applies to the film industry and software companies like Apple, suggesting that removing it only for oil companies would simply increase consumer gas prices.