Senate Republicans Block Windfall Profits Tax on Big Oil Companies
Democrats fall eight votes short of preventing filibuster
With gasoline prices topping $4 a gallon, Senate Democrats wanted the U.S. government to throttle back on the billions of dollars in profits being taken in by the major oil companies. But with the White House threatening a veto of the bill, the Senate voted 51-43 to close debate, well shy of the 60 votes needed to avoid a filibuster.The proposed windfall profits tax would have been somewhere between 10 and 12 billion dollars for this year, and it would have been levied against the country’s five largest oil companies. The legislation would have also rescinded $17 billion in tax breaks the companies expect to enjoy over the next decade.
“The oil companies need to know that there is a limit on how much profit they can take in this economy,” said Sen. Richard Durbin of Illinois, warning that if oil prices are not reined in, “we’re going to find ourselves in a deep recession.”
A statement issued by the White House’s Office of Management and Budget (OMB) said, “Rather than addressing the principal cause of fuel price increases — rising world petroleum demand without a similar increase in supply — (the bill would) undercut U.S. energy security and decrease U.S. energy production, thus exacerbating market tightness and increasing energy prices.”
I find it quite striking that the White House is still claiming that the principal reason for the precipitous jump in oil prices is the rise in global demand, when according to Chevron Vice President of Strategic Planning, Paul Siegele, demand is not currently on the rise. Siegele raised this very point with me less than two weeks ago at a panel discussion at Stanford. (For more on the slowing of global oil demand, this article in MarketWatch reports on the International Energy Association’s projected slowdown).
Following the bill’s defeat, Democrats said they may work on separate legislation to increase oversight of trading by the Commodity Futures Trading Commission. Many argue that one of the principal drivers of rising gas prices is actually because of futures speculation on the commodities market. Sen. Charles Schumer (D-NY) said that parts of the windfall tax bill including commission provisions could be split into separate proposals.
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how many of you guys have 401k’s or some other type of investments that involve oil companies? yeah… let’s stick it to the oil companies and hurt all of our retirement plans. let’s shoot ourselves in the foot!
people own the oil companies….it’s called stock.
when you tax and punish oil, you cut alot of people’s retirement and college funds…
that’s just about as idiotic as thinking that the president has the power of a king… i had gas this morning from the mexican food i ate last night…and it’s all bush’s fault….
demand for oil not rising.
surely the author is not so stupid as to believe this.
I’m still waiting for Murdoch to be correct on oil hitting $20 a barrel while we’re in war. Anyone?
Andy-
Please keep in mind that when “big oil” is “only” profiting ten percent of every gallon they they sell us, it’s still ten percent.
I started driving eleven years ago. Gas costed about $1.25 a gallon (Marin County has always been over priced in all sales.) So they would have made 12.5 cents for every gallon I bought, right? Now I’m paying $4.27 a gallon. What does that make them every gallon I buy?
Now take into acount that there is NO increase in oil demand.
Don’t get me wrong, this bill is retarded. You are right about that. Just consider how much they’re making, and why.
Take a look at how much ‘profit’ the oil companies make off an individual consumer. Do the math and it is probably less than $5/month. That is not a bad price to pay in order to have a gas station available on every corner. The reasons these profits are so high is that WE ALL BUY GAS. The end result of a profit windfall gas will be smaller energy companies higher costs through lack of scale and higher prices for the consumers.
Let’s take a look at the tax breaks, but a windfall profit tax? Please…
If you really want to reduce consumption - RAISE THE GAS TAX - reducing demand and ultimately reducing the price.
While they are making record profits the $17 billion in tax breaks should be rescinded.
Lets not forget the dollar side of the equation of oil. While politicians like to make claims of low direct taxes on the people, they have no problem indirectly taxing. Tax through inflation by monetizing the debt. When the Govt. borrows and prints money to cover foreign and domestic programs, all that new money devalues the money in your pocket. So basically the price of oil hasn’t really gone up that much, the value of the dollar has gone down. If we continue to run this country on unbalanced budgets be prepared to use a wheel barrel full of money to buy not only gas, but food/shelter/etc..
Let them have their profits. Thats business. The tax breaks should stop though as there is no reason they need it. If we let the government to start regulating profits we are asking for a world of hurt. Stopping all these tax breaks to oil companies would be a good idea though. We can’t let the government have too much power, which we actually did after 911. If people were actually smart they’d realize U.S.A has one of the lowest terrorist attack rates in the world! How many have we had after 9/11? What we get one ever 5 years, thats hardly cause for panic.
Bill said: (Congress wants to) “force conservation, force biofuels, force diesel. And we should do it on the backs of the poor and the middle class.
After all, if someone can’t afford a Prius: well, fuck ‘em. And, by the way: those who are suffering from the dictatorships and authoritarian governments propped up by American fuel dollars? Fuck them, too.”
I find his statements amusing and ill conceived. Personally, I’m driving a 1989 Toyota I bought for $600 and getting 40+mpg out of it. I switched from a GMC Jimmy that spewed oil and was frequently shop-bound. My wife switched from a 2005 Ford Windstar (blown head gastets, four transmissions) to a 1992 Ford Festiva (50+mpg, $700) I’ve already sourced a electric conversion kit which will fit for both vehicles ($2,225) and have taken appropriate steps to conserve the funds for the purchase. Who needs a prius?
I’ve saved approx $3,000 on the gas associated costs over the past year, and well over $5000 in repairs associated with heavier vehicles. My family of six makes approx $25,000, so it doesn’t make sense that this affects the poor more than the rich. The poor change easier towards what they can afford.
People who are the most vocal anti-environmentalists, preach the most about drilling for more oil and complain the most about the costs of gas seem to be the ones who have no problem driving a SUV with one passenger. I tend to think of the gas prices as a financial equalizer between my family and those rich, fat, greedy people. It makes me smile.
Subsidizing oil has never made any sense. Biphenyls in plastic and exhaust from every vehicle on earth is ruining our planet. If big oil isn’t at fault, then the government who allows global chemical infestation is at fault. Either way, our country has been supporting the proliferation of oil into our society because we like to make war. Our military needs oil to wage war (real reason diesel is more expensive than gas - not heating oils?!?), and our society has come to need plastic for everything because of convenience. We should be subsidizing solar, wind, railroad, and farmers who make edible food not starch for corn syrup. Congress has their work cut out for them. Protecting the toxic industries are keeping us behind the pace of global progress. Our gluttonous lifestyles are going to be imitated all over the world unless we change our ways. Can you imagine every country consuming at the rate we do? What would the future be like if every country acted like the spoiled teenager who won’t clean his/her room? Really, oil? Sooooo LAST century.