Senate rejects plan to hike taxes for top five oil companies

[peejay 327]

Senate rejects plan to hike taxes for top five oil companies

Posted on May 17, 2011 at 6:30 pm

Democrats’ bid to raise $21 billion over the next 10 years by hiking taxes for the nation’s five biggest oil companies failed a key procedural vote in the Senate today – but the issue isn’t going away anytime soon.

The subject is already fodder for political ads that try to paint Republicans as Big Oil allies who are out of touch with ordinary Americans suffering amid high gasoline prices.

And Democratic leaders vowed that a final deal to raise the nation’s debt ceiling this summer would include a repeal of tax breaks claimed by the big five oil companies.

“I am confident that before we finish our budget negotiations here in anticipation of raising the debt ceiling that that will be a part of it,” said Senate Majority Leader Harry Reid, D-Nev.

That would represent a revival of legislation that failed today to overcome a procedural hurdle when the Senate voted 52-48 to block consideration of the measure — eight votes shy of the 60 that were needed to launch debate.

Two Republicans — Sens. Susan Collins and Olympia Snowe of Maine — broke party ranks to vote for the legislation. Democrats Mary Landrieu of Louisiana, Mark Begich of Alaska and Ben Nelson of Nebraska crossed party lines to vote against the measure.

The bill, sponsored by Sen. Robert Menendez, D-N.J., would block the top five major integrated oil companies from claiming a tax credit on payments to foreign governments and a domestic manufacturing deduction that has generally been available to a broad range of U.S. firms. It also would bar the companies from claiming other tax breaks, including a deduction of intangible drilling costs, such as the cost of repairs, site preparation and hauling supplies.

President Barack Obama has asked for similar, industry-wide tax changes before, but Menendez’s proposal gained steam amid mounting anger over high gasoline prices and oil companies’ near-record first-quarter profits of more than $35 billion.

Both political parties have seized on the issue.

Democrats used the oil tax bill to bolster their debt-cutting credentials, by pledging to put the $21 billion in revenue to trimming the federal deficit.

Republicans, who argued that the tax plan would do nothing to solve the problem of high gas prices, instead pushed legislation to accelerate offshore drilling, which is expected to fail a test vote on Wednesday. That measure in turn gives the GOP a chance to argue Democrats are blocking more domestic energy production that eventually could lower the cost of crude oil and gasoline.

Menendez said Republicans who voted against the tax bill were siding with Big Oil at the expense of “working class families.”

“There simply is no common-sense explanation for balancing the budget on the backs of working families and letting multi-billion dollar oil companies keep billions in taxpayer dollars,” he said.

Sen. Claire McCaskill, D-Mo., who is running for reelection next November, said any “no” vote would be tough to defend, given the $125 billion in projected profits for the five biggest oil companies this year.

“How do you explain to your constituents that are struggling around their kitchen table to figure out how to afford to drive their kids to soccer practice that instead of $123 billion of profit Big Oil is going to make this year that they need to make $125 billion?” McCaskill asked.

But Landrieu argued that the measure was unfairly trying to make the oil industry a “scapegoat” for high gasoline prices, even though the bill “will not lower prices at the pump by one penny.”

“It might make us feel better to beat up on Big Oil,” she added, “but it will not lower prices at the pump.”

Sen. John Cornyn, R-Texas, said Democrats and the Obama administration were engaged in “a public relations” and “how-do-I-get-reelected strategy.”

“It’s punitive. It’s discriminatory,” he said. “And it’s not going to solve the problem that most Americans are complaining about today, which is high gas prices.”

Sen. Lisa Murkowski, R-Alaska, stressed that the bill was being used for political messaging. “This proposal is designed to fail,” she said, “but in failing, it is designed to score political points.”

The bill is already political ammunition for both parties. The National Republican Senatorial Committee has accused Democrats running for reelection of wanting to impose new “energy taxes” on consumers.

And the Democratic Senatorial Campaign Committee on Monday launched advertisements on Google and Facebook headlined “Gas prices are high enough!” The campaign, which targets Snowe, Sen. Scott Brown, R-Mass., and several Republicans considering Senate bids, asks users to “stand with the DSCC and tell Republicans to stop subsidizing Big Oil.”

http://fuelfix.com/blog/2011/05/17/senate-rejects-plan-to-hike-taxes-for-top-five-oil-companies/

Edited May 18, 2011 by peejay

[Pooky 3,830]

And the Democratic Senatorial Campaign Committee on Monday launched advertisements on Google and Facebook headlined “Gas prices are high enough!” The campaign, which targets Snowe, Sen. Scott Brown, R-Mass., and several Republicans considering Senate bids, asks users to “stand with the DSCC and tell Republicans to stop subsidizing Big Oil.”

Ummm, didn't Senator Snowe vote for this measure?

[Mr. Big Dog 10,747]

We wouldn't want to cut these gentlemen off the teat, would we?

[Pooky 3,830]

We wouldn't want to cut these gentlemen off the teat, would we?

Certainly hasn't slowed down with the current administration, has it?

[Zero Sum 305]

So we should be arguing to push Obama to cut the teatline himself. With a blunt knife.