US should tax excess oil company profits -senator
07 Sep 2005 17:50:29 GMT
Source: Reuters
WASHINGTON, Sept 7 (Reuters) - With crude oil and gasoline prices surging to record highs after Hurricane Katrina, a U.S. senator on Wednesday introduced legislation to tax some of the extra profits big oil companies are earning.
Profits earned by the major oil companies on crude oil above $40 a barrel would be subject to a 50 percent excise tax under the bill proposed by Sen. Byron Dorgan, a North Dakota Democrat. The revenue would be rebated back to consumers.
Oil traded on Wednesday has high as $66.50 a barrel at the New York Mercantile Exchange.
Dorgan said major oil companies were reaping record profits "off the backs of consumers," and their earnings will keep increasing from higher crude oil prices and pump costs that jumped above $3 a gallon nationwide following the disruption in petroleum supplies caused by Katrina.
"Everyone expects American businesses to make a profit and I don't begrudge them that. But the big oil companies are now reaping an unbelievable windfall, and it's time for Congress to help consumers," Dorgan said.
Under Dorgan's proposal, the tax would be in place for three years, and companies would be exempt if they used excess profits to explore for oil, build a refinery or invest in renewable energy sources.
"If, in fact, they're using it to buy back their stock, buy jet airplanes, buy other companies, do a range of things that are now occurring in the oil industry, then they would have to pay the windfall profits tax," Dorgan said.
The rebates would go to all taxpayers, not just to individuals who own vehicles, according to Dorgan.
"The price of gasoline and oil is not just what we run through our carburetors or our fuel injectors. Virtually every day in every way that which we purchase has a consequence as a result of what's happening to the price of energy," he said. |
