Posted on 01/14/2007 7:40:41 AM PST by Flavius
Washington, D.C. - Democrats in the U.S. House of Representatives on Friday introduced a bill that would rescind billions of dollars worth of tax incentives extended to U.S. energy companies and put the money into a fund earmarked for renewable energy. Democrats in the U.S. House of Representatives on Friday introduced a bill that would rescind billions of dollars worth of tax incentives extended to U.S. energy companies and put the money into a fund earmarked for renewable energy.
Sponsors of the Creating Long-term Energy Alternatives for the Nation Act, or CLEAN, said it will save U.S. taxpayers about $13 billion over an unspecified number of years, but industry groups said it could hinder U.S. oil companies' ability to find and develop new energy sources.
Going after "Big Oil" is a top priority of the House of Representatives' Democratic leadership, which says oil companies have earned record profits at the expense of U.S. motorists paying high gasoline prices.
As part of legislation they pledged to unveil in the first 100 hours of the new legislative session, House Speaker Nancy Pelosi and nearly 200 co-sponsors introduced a bill that repeals a 2004 tax deduction for energy companies.
The bill also rolls back tax breaks for geophysical studies conducted by the five biggest U.S. integrated oil companies, and repeals some incentives to produce oil and natural gas in deep waters of the Gulf of Mexico.
However, the bill did not change oil and gas inventory accounting rules that some analysts said were in play in the legislation, and left intact incentives to build new U.S. refineries.
Instead, the lion's share of the savings comes from striking a phased-in 3-percent tax reduction that Congress gave to all U.S. manufacturers in 2004, which would have been in force through 2013. Ending that benefit will save about $6.5 billion in the 2007-2016 period, according to data from Congress' Joint Committee on Taxation.
In comparison, ending the geophysical tax breaks will save $103 million, according to committee data.
The bill would take the savings and put it into a renewable energy fund, which Congress will dole out at a later date to provide incentives for yet-unspecified renewable energy sources.
"This is just an act to take money from the oil industry and use it on alternatives -- that's just a repeat of the mistakes of the past," said John Felmy, chief economist at the American Petroleum Institute, U.S. oil and gas companies' biggest lobbying group.
Similar measures pursued by Congress in the 1980s that taxed oil industry profits and diverted money toward renewables were a "colossal failure" that ended up lowering U.S. oil production and boosting import dependence, Felmy said.
Environmental groups applauded the bill.
Friends of the Earth called the bill "a significant and welcome departure from the energy policy offered by the previous Congress and the Bush administration." Reuters
Under $1.25/gal. before Mrs. Clinton returns to her office.
CLEAN, said it will save U.S. taxpayers about $13 billion over an unspecified number of years
I found this line to be extremely funny. Shouldn't there have been a sarcasm tag after it?
Ask the Soviets how that whole centralized planning thing worked out for them.
my whole world is turning into a big sarcasm tag
The "Tax the Hated Corporations" fallacy:
Businesses don't pay taxes --
businesses *collect* taxes from --
(are you ready?)
(you've probably guessed it already)
Thee 'n me....
"the lion's share of the savings comes from striking a phased-in 3-percent tax reduction that Congress gave to all U.S. manufacturers in 2004"
Those manufacturers would be better off in Mexico, or China or some such cheap labor low tax place anyway. Take away the tax cuts, raise the minimum wage, WOW, these democrats really do hate this low unemployment/inflation thing Bush has going. What a shame!
It has nothing to do with economics it's all about concentrating power in Washington.
Could anyone shed some light on the energy industry's use of the funds they're keeping as a result of these tax breaks? IIRC, they're using those breaks to fund more exploration of domestic oil resources. Is that wrong?
To me, this whole thing seems like the Dems punishing anyone who is now or once was associated with Bush or given assistance by the administration. Am I wrong?
no your wrong
they just started
Surely Nancy Pelousy must know of some other "big fish" that need looking into.
In comparison, ending the geophysical tax breaks will save $103 million, according to committee data.
New math, apparently - So the liberals come in, and gosh, aren't even there for a week, and they're already raising taxes! One hundred hours, they're aiming to raise taxes, just on this one bill, $6.6 billion dollars.
National GOP to the white courtesy phone please, your base would like you to make a commercial. Because if we don't hammer them now on it, it'll be an empty issue in 2008. Oh, and the RINOs will find it a lot harder to swallow leaping onto the band wagon.
And what does the senator from Exxon say? Somehow this benefits NY and NJ oil and disadvanges Texas, surely.
I understand what you are saying, but everything has something to do with economics. Lucky for us this garbage, if passed, would still have to go through the Senate and be signed by the President. I know his veto pen is rusty, but I think he may be greasing it up.
Honestly, I don't know nearly enough about the oil industry to say one way or the other, but why does the elimination of tax breaks prevent the oil companies from developing new sources? They are profitable. None of them, to my knowledge, are going bankrupt. On the other hand, I don't understand why it's a better idea to prop up alternate energy technologies. For example, wind and solar power are terribly inefficient and very expensive. Politicians just can't keep their hands out of the marketplace. Government interfere IS the problem, because the market will find the most economical solution for America--not a bunch of politicos beholden to special interests IMHO.
"The "Tax the Hated Corporations" fallacy:
Businesses don't pay taxes --
businesses *collect* taxes from --
(are you ready?)
(you've probably guessed it already)
Thee 'n me...."
One of my friends uses a wonderful analogy when told that the government should tax someone specifically. He replies "Pump the water out of the other guy's side of the lake."
I wonder if they'll take a hard look at Occidental. Oh wait, my bad, Occidental is a big oil friend of Al Gore. Nevermind.
Well, it isn't as if they have actually passed the bill and gotten it signed into law.
Whatever Nancy wants, Nancy gets.
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