House Approves New Taxes On Big Oil

Passes $18 Billion In New Taxes On Biggest Oil Companies; Measure Awaits Senate Action

(AP)  The House approved $18 billion in new taxes on the largest oil companies Wednesday as Democrats cited record oil prices and rising gasoline costs in a time of economic troubles.

The money collected over 10 years would provide tax breaks for wind, solar and other alternative energy sources and for energy conservation. The legislation, approved 236-182, would cost the five largest oil companies an average of $1.8 billion a year over that period, according an analysis by the House Ways and Means Committee. Those companies earned $123 billion last year.

Senate Democratic leaders said they would put the bill on a fast track and try to avoid a Republican filibuster. The White House said the bill unfairly takes aim at the oil industry. President Bush is expected to veto the legislation if it passes Congress.

House Majority Leader Steny Hoyer, D-Md., noted it was two years ago, when oil cost $55 a barrel, when Bush said oil companies need no government subsidies to pursue more oil or gas.

"With the price of oil hovering around $100 do we really believe this incentive is justified?" asked Hoyer. "Do these companies need taxpayer subsidies to look for new product? They don't need any incentive."

Republicans said the measure unfairly targeted a single industry.

"It punishes the oil and gas industry. This is wrongheaded. It will result in higher prices at the gasoline pump. It's spiteful and wrong," said Rep. Jim McCrery, R-La.

The top Republican on the Ways and Means Committee, which developed the tax proposals, he cited statistics that show that oil companies already pay more taxes than many other industries.

Hoyer acknowledged "this legislation alone will not bring down gas prices." But he said the measure will provide a needed boost to alternative energy industries — solar, wind, biofuels, and geothermal — and help promote energy conservation. "That may bring down gas prices three years from now, 10 years from now," he said.

The bill would roll back two lucrative tax breaks for the five largest U.S. oil companies. One helps manufacturers compete against foreign companies; the other gives American companies a tax credit related to oil and gas extraction outside the country. Democrats estimated that those current breaks would save the oil companies $17.65 billion in taxes over the next 10 years.

The House-passed bill would use that money to promote renewable energy industries — such as wind, solar and cellulosic ethanol plants — by extending tax credits that recently expired or are scheduled to end at year's end.

The bill would offer tax credits for more energy efficient homes and a credit for "plug-in" gas-electric hybrid cars that would capture electricity off the power grid, once such cars become available in showrooms.

House Speaker Nancy Pelosi, D-Calif., said the shift of tax benefits from oil to alternative energy development was critical to increased energy independence and lowering energy costs. "We have the opportunity to invest in clean, renewable energy and energy efficiency," she said.

She noted the House twice last year passed similar tax plans, but they died in the Senate. Since then, the price of gasoline has climbed and large oil companies have made record profits, Pelosi said.

During debate, Rep Jim McDermott, D-Wash., urged lawmakers to "stop the madness of subsidizing oil companies" when the industry earned $123 billion last year.

The oil industry has lobbied intensely against the House tax legislation, calling it a "discriminatory bill" that targets companies that already pay considerable taxes. "New taxes ... will even further reduce our energy security by discouraging new domestic oil and natural gas production and refinery capacity expansions," the American Petroleum Institute said in a statement.

But other energy industries and energy efficiency advocates have campaigned for the legislation because of the tax incentives that would be directed their way.

"These incentives must be extended immediately to void significant harm to the development of clean energy industries in the United States," said a letter to lawmakers from more than 100 businesses, electric utilities, environmental groups and energy efficiency advocates.

A similar tax proposal passed the House last summer, but it was abandoned in the Senate where Democrats couldn't muster the 60 votes needed to overcome a GOP filibuster. Senate Democrats were maneuvering to avoid a repeat of that with the newly passed House measure.

The chairman of the Senate Budget Committee, Democratic Sen. Kent Conrad of North Dakota, said Democratic leaders are considering advancing the House bill under fast-track procedures related to the budget. This process would not permit an indefinite GOP stall.

The White House says singling out the oil companies for higher taxes "would reduce the nation's energy security rather than improve it" and "lead to higher energy costs to U.S. consumers and business."

Senior advisers would urge Bush to veto the bill should it pass Congress, the White House said in a statement before the House vote.

[fstop100]

so they pass it on who wins? big oil and friends.
who loses Americans

[rowdytexan2]

It''s about freaking time the oil companies start contributing to the war for oil!

Why couldn''t they have just used their own dollars and hired some mercenaries to go get their oil contracts and pipelines! Or better yet, just bribe some of the oil ministers?

No, they put their puppet in office, and thought they could get away with using US money, and US soldiers to get it for them for free.

George Bush isn''t going to be in office much longer to protect these SOB''s, thank goodness! Nor will he be protected for his crimes!

[hypnotoad72]

Forgive me, but rescinding taxes is NOT giving them "new taxes".

Republicans and some Democrats say welfare is wrong. People need to pull themselves up by their bootstraps. Now I''ll readily admit I am naive, but how will oil companies suffer and go bankrupt by rescinding cuts that did not help the national debt in the first place? "Corporate personhood".

And, no, rescinding cuts isn''t the same as taking away welfare.

The world needs oil and their profits are not going to be hurt by rescinding anything. Do they really need taxpayers to give them extra revenue? We are already paying at the pump while they report record profits.

It''s like, or rather the inverse, of what people say when cutting a government program, "They are still getting $x more this year than last, so it''s not really a cut. Just not as much funding as in years'' past."

[the74blaster]

Democrats gonna put the Republicons in Congress in a corner everyday from here to election time, because they know that Republicons will vote against this action, and Bush will veto it too. GO DEMS! ConDumbs are gonna lose at least 6 more Senate seats and at least 30 more House seats in November. GO DEMS!

Posted by neoconism,

Its about time! Hopefully, the party of greed takes a record beating.

[georgiagrl1]

While it sounds like a great idea to try to get at some of those huge profits Big Oil made at our expense, I''m afraid they will pass that on in the form of higher gas prices at the pump. So we will wind up paying for this in the end.

[rowdytexan2]

While they''re passing this legislation, they should put a moratorium on raising gas prices!

If they''re going to do it, do it up big!

[cbsblogger]

They can''t pass it on unless they collude which is illegal. Gasoline is a commodity subject to competition. There will always be a provider that will undercut the others. These taxes are needed (they were needed 15 years ago) to fund incentives for individuals to increase energy efficiency of their homes and use alternative forms of energy such as solar.

[cbsblogger]

This is the smoking gun yet the media never mentions it. Gasoline has been going up in price because the oil refiners have purposely been cutting production and closing refineries since the 80s and have not built any new production facilities. They did it specifically to create a shortage that would raise the price of gasoline.

The following oil industry quotes are referenced in an investigative study commissioned by US Senator Ron Wyden of Oregon on June 14, 2001. [2]

"As observed over the last few years and as projected well into the future, the most critical factor facing the refining industry on the West Coast is the surplus refining capacity, and the surplus gasoline production capacity. The same situation exists for the entire U.S. refining industry. Supply significantly exceeds demand year-round. This results in very poor refinery margins, and very poor refinery financial results. Significant events need to occur to assist in reducing supplies and/or increasing the demand for gasoline.%u201D
Internal Texaco document, March 7, 1996

%u201CA senior energy analyst at the recent API (American Petroleum Institute) convention
warned that if the U.S. petroleum industry doesn%u2019t reduce its refining capacity, it will never see any substantial increase in refining margins%u2026However, refining utilization has been rising, sustaining high levels of operations, thereby keeping prices low.%u201D
Internal Chevron document, November 30, 1995

[randynason]

That''s an obscenely low price to pay, considering these companies have failed to pay any windfall profit taxes since Dum-Dum has been in office.

[denn034]

The higher big oils costs are the greater the likelihood of lay offs and higher gas costs. Duh!

[ajmarine1]

I''''m afraid they will pass that on in the form of higher gas prices at the pump. So we will wind up paying for this in the end.

Posted by GeorgiaGrl1 at 09:09 PM : Feb 27, 2008


We have a winner; give that lady a cigar, because that is exactly what is going to happen.

[ajmarine1]

While they''''re passing this legislation, they should put a moratorium on raising gas prices!

If they''''re going to do it, do it up big!

Posted by RowdyTexan2 at 09:15 PM : Feb 27, 2008


If they are going to do that, why not just decide on a price everyone likes and freeze it there?

[newsjunky5]

When Bush first took office he had a meeting with the heads of the energy companies. The Sierra Club tried to get the transcript of that meeting. It went to court, and they lost. If the public only knew what price was promised to them, we could plan better.

[ontheleft]

''so they pass it on who wins? big oil and friends.
who loses Americans

Posted by fstop100 at 08:51 PM''

That''s not how it works. The tax would be on year end profits, not a tax per gallon sold. Also, it''s kind of hard to ''past it on'' if the market can''t bear it. Right now, gasoline demand is down and inventories are at record high levels. The only thing propping the prices up are the commodities markets.

The reality is that the oil companies would have to eat it. They''ll just make less money. But don''t worry about them, they can afford it.

[bobnjersey]

[If they are going to do that, why not just decide on a price everyone likes and freeze it there?]
[Posted by AJMarine1 at 10:12 PM : Feb 27, 2008]

good idea ... how about the price they charge in baghdad?

[donbl1]

Boy, this is really going to help.

Can''t the House think of anything but politics?

The Big 5 oil companies do NOT own much of the oil in the world. They buy it, transport it, refine it and distribute it.

So, guess who really pays for the additional $18B in taxes? We will in higher gas prices as the additional taxes will be a "cost of business".

How stupid.

[ontheleft]

''The Big 5 oil companies do NOT own much of the oil in the world. They buy it, transport it, refine it and distribute it''
Posted by donbl1 at 10:29 PM

True, when the U.S. oil companies buy $100 a barrel oil and refine it, they aren''t making much money off it, but they DO own or lease a lot of their own sources both here and abroad. U.S. oil fields weren''t profitable at $18 a barrel, but now they certainly are. Exxon made a $40 billion profit last year.

[duffyn]

There''s nothing stupid about this bill, unless you own a lot of oil company stock. How long do people have to take it in the shorts and panties b4 they wake up??? bush and his cohorts are ruining the country that gave them the golden egg with their greedy profit taking. Do they are.. no..... Just what our economy needs right now, more expensive gas.. not!

[rowdytexan2]

So, guess who really pays for the additional $18B in taxes? We will in higher gas prices as the additional taxes will be a "cost of business".

How stupid.


--------------------------------------------------------------------------------

Posted by donbl1 at 10:29 PM : Feb 27, 2008

I guess $123 billion in profit isn''t a lot of money to you, but it''s be about 20,000 years of work on my salary.

They need to put a moratorium on raising gas prices along with this bill to make it effective.

[newsjunky5]

donbl1 -
The increased tax is actually a roll back of a tax benefit they shouldn''t have had in the first place.
And they are operating well above the "cost of doing business)

But the price will go up because of the Repubs loosing power. As soon as Bill Clinton was impeached, making him somewhat powerless, the price of gas started going up. (Summer 2000)
Think of it as a kind of coercion, like zoned pricing.

[ajmarine1]

how about the price they charge in baghdad?

Posted by bobnjersey at 10:27 PM : Feb 27, 2008


How much is that?

Maybe they can charge what it goes for in Iran, which is 40 cents a gallon.

[donbl1]

Newsjunky, it works like this.

EPS goes down therefore stock goes down.

How do you get the stock price back up? Increase the gross margin which comes from higher prices or lower costs. Higher prices will win.

[walt1944-2009]

The Great Emperor Bush is angry that the House has passed a bill levying huge taxes on the BIG OIL companies.

As has been reported many times before, the Great Emperor Bush follows the rules of "Ferengi Economics" as outlined in the Ferengi bible "The Rules of Aquisition" which flatly state that companies and businesses, no matter how large or small, are allowed to realize as large a profit as they can lay their greedy hands on and to hang on to that profit for as long as they can, and to devil with what the consumer thinks!

For right now, the Great Emperor Bush is getting his VETO pen ready to VETO another round of bills passed by the evil, cowardly Whimpo-crats who do not understand the theory of "Ferengi Economics" as the Great Emperor and the stupidly-loyal neocon Fascist Nazi Republicans do. To them, the consumer does not matter, only the size of a company''s bottom line is all important.

SIG HEIL, BUSH!!!!
sig heil, McCain????

[bookout2]

Spin, spin, spin. Don''t worry, when Barack get
in office he will cave in to the oil companies and
we can still spend our entire pay check for gas.
Now, isn''t that exciting?

[misands]

The more the oil companies blantently rake in ungodly sums of money, the more likely the govenment is going to be forced into regulating the industry. These oil barrons are so drunk with greed that they are wrecking our economy as they rape the consumer!

[kaylag04]

Demopublicans and republicrats in congress should have to fulfill an Economics 101 requirement before being allowed to vote. Profit and profit margin are different. A small amount of research reveals that oil-company profit margins (amount of profit after exploration, development, production and marketing) run approximately 10%, and have for decades. Not a bad return on investment, but far from obscene profit. "Obscene" profits come from obscene worlwide demand - there have been as many new car owners created in China in the last decade as there are car owners in the US. All these new drivers use gasoline, which comes from oil, which is a fungible resource. Obscene profits also lead to obscene government revenue, with Exxon''s last tax payment equalling 27 billion dollars.

[marcpcbs]

Doesn''t the House know that these oil companies are just going to pas this taxation on to the consumer at the pump.

[johnshaft4]

Who in the hell cried for us when oil was only $9 a Bbl while we were trying to stay in business while you jerks thought that your little housing "boom" would not go bust. Indeed, he who laughs last, laughs best. Blame yourselves and the morons YOU elected for the lack of nuclear and the BILLIONS wasted on UNUSED spent nuclaer feul respositiores. (In your cases, it should be suppositories.) Further, jerks you allow yourselves to take it up the tail by not DEMANDING a 100% tax credit to retrofit existing (and new) dwellings for any kind of active/passive solar. Don''t blame me for laughing all the way to the bank because of YOUR stupidity. What a bunch of morons you people are...

[johnshaft4]

P.S....george Bush and Cheney are too stupid to find oil and gas. Bush/Cheney could not find a drop of oil under a car or a quart of oil in a filling station. Bush''s Spectrum 7 and harken Energy were complete busts. That''s why they have to steal it (see Iraq). In the biz, it is called "force pooling." Yet, you idiots continue to pay taxes to underwrite the very fraud you have pertrated on yourselves weith the resultant deaths, injuires to our troops and the deficit. (Fine bunch of Christians you are.) I work 20 hour days in geology and geophysics to find domestic reserves. Screw yourselves...

[jesterbelle]

I''m not a fan of social programs,but since it is pretty obvious that business wants to reap huge profits while their employees can''t even pay the light bill,it will be a pleasure watching them squirm at the hands of a democratic congress. Bush may save you boys on this one,but wait until Obama gets in.He has his flaws,and he''s obviously not the savior,but he could very well be Robin Hood!LOL:-0

[rudy654-2009]

Excerpt: With the price of oil hovering around $100 do we really believe this incentive is justified?" asked Hoyer. "Do these companies need taxpayer subsidies to look for new product? They don''t need any incentive."
********

So we provide the gas comapnies subsidies so they can make mega profits while we are hurting to figure out how we are going to make it through the year??? What an upside down world we live in.

[jowand]

So we provide the gas comapnies subsidies so they can make mega profits while we are hurting to figure out how we are going to make it through the year??? What an upside down world we live in.
Posted by rudy654 at 03:20 AM : Feb 28, 2008

This is the same Congress which has pushed ethanol production from corn. Corn prices are up 40 percent ,still rising, and food prices are going up as corn goes up.
These same loons will have gas at 7.00lus dollars a gallon before you wake up to the real world.

[samrensho]

Since Bush''s family is in the oil business I''d sure as hell expect him to veto any taxes that would tap into his wallet. No conflict of interest there, hmm hmm, no way Jose. LMAO

[shanev137]

All you people who voted for Bush are morons.

[jesterbelle]

I''''m not a fan of social programs,but since it is pretty obvious that business wants to reap huge profits while their employees can''''t even pay the light bill,it will be a pleasure watching them squirm at the hands of a democratic congress. Bush may save you boys on this one,but wait until Obama gets in.He has his flaws,and he''''s obviously not the savior,but he could very well be Robin Hood!LOL:-0

[jesterbelle]

This is the same Congress which has pushed ethanol production from corn. Corn prices are up 40 percent ,still rising, and food prices are going up as corn goes up.
These same loons will have gas at 7.00lus dollars a gallon before you wake up to the real world.


--------------------------------------------------------------------------------

Posted by jowand at 03:47 AM : Feb 28, 2008

Loons?It''s all part of our five year plan,honey.I suggest you sell your SUV,buy a mo-ped,and some black quilted pajamas.Oh,and get ready for some new neighbors,about twenty of them moving in with you comrade.I''m a newby and I''ve been reading your posts on various articles.What year will you be graduating from high school?

[juwboy]

Why aren''t we taking measures to break up the OPEC cartel?

We should target an oil producer with a vulnerable economy like Nigeria.

If we offer to buy twice as much oil from them at $80 per barrel instead of the $100 approx. we''re paying now, the Nigerians will be better off and it''ll be the first step in breaking up OPEC.

When I first suggested this a few months ago, jerryomara and brianbwb jumped all over me, saying the Nigerians are not stupid and, obviously, $100 a barrel is better than $80, so how will they benefit from the lower price?

Shame on me! I assumed that jerryomara and brianbwb were as knowledgable and informed as I am. Clearly, they''re not.

Nigeria, like all OPEC nations is intentionally holding back oil production to keep the prices artificially high. If they cranked the production up and sold more oil at a lower price, they''d clearly be better off.

Other OPEC nations would follow Nigeria''s example and then the entire OPEC price-fixing cartel would collapse like a house of cards.

Result: lower gas prices at the pump.

[knyghtwolf]

"The money collected over 10 years would provide tax breaks for wind, solar and other alternative energy sources and for energy conservation." Guess who owns the research facilities who runs these studies? As soon as BIG OIL can find a way to convert hydrogen to fuel from the very air we breathe, guess who will all of a sudden by the rights to the atmosphere to our planet and declare war on the rest of the planet in order to secure it? Yeah, I know it sounds stupid, but you are the SAME FOLKS that voted the shrub monkey in TWICE, right?

[johngoodnews]

The oil industry in the US needs to be regulated and treated like any other utility that engages in monopolistic economic practices.

[sleepyric]

this is actually TOO funny....you idiots,,,this bill hasn''t got a chance of passing the Senate or Bush...it''s DOA...waytogo.....another stunningly stupid attempt by a lame congress!

[smilnjackw]

I can''t believe how stupid peloski is. We need to be drilling in Anwar not imposing higher gasoline prices on the consumers. Corporations don''t pay taxes, the consumers pay those taxes. Lower your standard of living peloski and gore, kerry, kennedy. clinton and obama just spent 250 million(wasted) lets tax that at 50%. I''m sick of the democrats tearing this great country down. throw the incompedents out and set term limits.

[jeff-fla]

-I can''''t believe how stupid peloski is. We need to be drilling in Anwar not imposing higher gasoline prices on the consumers. Corporations don''''t pay taxes, the consumers pay those taxes. Lower your standard of living peloski and gore, kerry, kennedy. clinton and obama just spent 250 million(wasted) lets tax that at 50%. I''''m sick of the democrats tearing this great country down. throw the incompedents out and set term limits.

Posted by smilnjackw

Remember it was Clinton who had oil down to less than $9.00 a barrel. He put pressure on the oil companies. He had oil lower in his term, than in anytime in history. Maybe just maybe they know what there doing. What the republicans are doing, seems to make it worse. Couldn''t be any worse than it is now?

[olebd]

Exxon made a $40 billion profit last year.

Posted by ontheleft at 10:37 PM : Feb 27, 2008

Correction: Exxoon Made $40.6 billion in profit just in the last quarter! They made about $100 billion in profit total last year. This is beyond greed, beyond ridiculous, it is vulgar.

[olebd]

What we need to do is start demanding Iraq pay us for our services in oil. Along with all the other countries who we send aid to. Pay us back with oil.

[antizion]

Nationalize the oil companies globally since they have committed anti trust and monopolistic crime with the blessing of our congress of blackmailed sexual pervert that have been stuffed into Washington.

Hey congress, where is the 2.6 trillion that was stolen from the pentagon budget off. See CSPAN the day before 911. The next day, the evidence was destroyed of the biggest theft in history of Earth.

[antizion]

What we need to do is start demanding Iraq pay us for our services in oil. Along with all the other countries who we send aid to. Pay us back with oil.
Posted by olebd at 07:16 AM : Feb 28, 2008
========================================
For our services? Invading based on lies and fake evidence and occupying is a war crime. Killing 1.1 million Iraqis was a war crime. Now you want to send them the bill? How sick.

Seek reality.

[mcvet]

It''s ABOUT time!!

[mcvet]

I can''''t believe how stupid peloski is. We need to be drilling in Anwar not imposing higher gasoline prices on the consumers. Corporations don''''t pay taxes, the consumers pay those taxes. Lower your standard of living peloski and gore, kerry, kennedy. clinton and obama just spent 250 million(wasted) lets tax that at 50%. I''''m sick of the democrats tearing this great country down. throw the incompedents out and set term limits.


--------------------------------------------------------------------------------

Posted by smilnjackw at 06:57 AM : Feb 28, 2008
+ report abuse

ROFLMAO Sparky WE need that money and rest assured it''s NOT going to lower the cost of gas ONE nickle... Geeeeezzzz YOU freaks seem to NEVER learn.

[antizion]

They do not pay taxes now. Is that the best congress can do? This is designed to take pressure off congress, manipulate the american people while america is taken down from within by the zionist to hide the theft of 2.6 trillion by the zionist merchants of death.

How about a 100% tax for war crimes and treason?

[antizion]

The sad reality is that you can run a car on water after the water is electrically charged to change the bond angle of the hydrogen atoms. Google Stan Meyer, Puharich and others.

Youtube stan meyer.