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  • Oil Tax Hike is About Raising Revenue, Not Clean Up

    Instead of concentrating on the cause of the oil spill, lawmakers on Capitol Hill appear to be focused on liability limits and oil tax increases. The White House and some Members of Congress are pushing for a one-cent increase per-barrel of oil produced – from eight cents to nine. In reality, this is an indirect gas tax that will be passed onto the consumer. Currently the direct federal gas tax is 18.4 cents per gallon with the mean state tax being 27.2 cents per gallon. The purpose of the newly proposed tax hike is to increase the amount of funds available in the Oil Spill Liability Trust Fund and ostensibly collect more money for the clean up. But the real purpose is to make political ends meet.

    Although it doesn’t sound like much, the Wall Street Journal reports that “The one-cent increase would raise about $5 billion over 10 years to help offset the cost of the tax package, which is nearing $200 billion. The tax could go to 10 cents a barrel in 2017.”

    Wait. What tax package? Politico says, “The added revenue is coveted by tax writers, still struggling to find close to $50 billion in offsets needed to pay for an election-year package of infrastructure investments and popular tax break extensions.” This makes one wonder: is this about cleaning up the Gulf or making ends meet for other political agendas?

    This is another opportunity for the government not to let a good crisis to go to waste. At a time when government spending has run rampant, why not try to use the oil spill to raise some revenue for other spending objectives.

    Regardless, BP is on the hook for all direct cleanup costs and has repeatedly said it will cover all legitimate claims. 1,000 of 6,700 claims have already been paid, and no one knows what the total cost is going to be. We should have a better understanding of how much the oil spill will cost before making any policy decisions. Lack of funding or resources isn’t the problem.

    Other than clean up and containment, the primary focus should be on the cause. We have some information as to what went wrong. The rig’s emergency shutoff valve reportedly had a dead battery and questions are arising over Haliburton’s job of cementing the well. These are the still a number of questions without answers as to what caused this spill and answering them should remain a priority.

    An encouraging development occurred on the Gulf oil spill crisis over the weekend. The process of inserting a tube to siphon oil from the ocean’s floor is working to capture approximately 1,000 barrels of the leak. This is about one fifth of what’s pouring out but BP officials are optimistic they can capture most of it using this technique. Along with finding a fully effective solution to capping the leak, the primary focus must remain on finding the cause(s) of the spill and cleaning up the mess expeditiously and successfully. This tax suggestion isn’t about the clean up or protecting against the cost of future clean ups. It’s another political shell game.

    Posted in Energy [slideshow_deploy]

    15 Responses to Oil Tax Hike is About Raising Revenue, Not Clean Up

    1. Pingback: Oil Tax Hike is About Raising Revenue, Not Clean Up | Prayer And Action

    2. Lloyd Scallan - New says:

      It's all about radical environmentialist ending all drilling, offshore or inland. If

      gas prices skyrocket double or triple, so much the better. They are sick enough to believe that we can live without oil, and live in their distorted world of an "alternative energy utopa".

    3. Drew Page, IL says:

      BP is going to pay for the clean up? Please. Do you think BP is going to settle for less profit, or reduce its dividend to stockholders? Where do you think BP gets its money? The same place the government does, from us. This will be just another cost of doing business, passed along to the consumer.

    4. stirling, Pennsylvan says:

      Look no further then the EU to see where this administration would like this country to be. ($7-$9/gal gas). This would force everyone into driving less and riding in 2-seater tin can coffins. They just don't want to tell the truth when it comes to the economic disaster that would come with making this happen.

    5. Norma from Nebraska says:

      Once more Rohm's favorite quote is in play, "don't let a good crisis go to waste." Instead of doing the right thing to protect the people of this country, the government is dismissing the real hazard of the oil on the loose . . . they are only thinking of ways to amass more power and suck up more money for the coffers!

      Is anyone surprised . . . especially when you consider the track record of this administration? I wonder if the only way this death spiral is a total revolt of American citizens against the non-democratic government that we now have in power. Shut off the money feeding the beast . . . .

    6. Omri says:

      The demand for gasoline is highly inelastic, which means it doesn't matter how we get the oil industry to pay for the Gulf cleanup. Whether through litigation or taxation or any other means, whatever expenses BP pays for the cleanup will work their way to the gas pump.

      The only alternative is to make the nation pay it out of general funds.

    7. Pingback: Streetsblog Capitol Hill » Today’s Headlines

    8. Richard Madden, NY says:

      It is time to put a $4.00 per gallon tax on gas and diesel fuel. This will serve the dual purposes of reducing our oil addiction and paying for cleanup of this oil explosion disaster.

    9. Dennis Social Circle says:

      Taxes are the back bone of the dems!!!!! This is just another way for them to get more of our money, no crisis is worth wasting if political hay can be made. The next thing we will hear is "BUSH" was the cause of this in the Gulf. The obama clan will never take responsibilityu for any thing that happens, and then will appoligize for all that he percieves we have done or will do.

      We must vote in November.

    10. D.C.Andrews says:

      Listen to the advice of experienced experts and "Do the Right Thing" as Gov. Huchabee would say!

    11. j.c.miller says:

      you should always cut taxes and try to spur the economy by tax incentives.raising taxes in hard times is the wrong thing to do.the problem needs to be focused on job creation,less spending in the federal government,and more accountable and responsible wisdomused,its called common sence economics.dont spend more than you have.

    12. j.c.miller says:

      it is not the responsibility of tax payers to be jolted for energy tax,the oil spill should have been dealt with may 2nd or third.shows how the obama administration is messing every thing it tries to deal with,he and his gang are only going to destroy this country and he seems to be succeding,we need to stop this foolishness and get these people unemployed,

    13. S Rubicon, Southcent says:

      With all due respect, w/o oil, natural gas, &/or coal, America will come to an economic standstill. Wind & solar can only produce approximately 25% to 35% of our needs, even after conservation. Wind & solar are limited & that is the message the public has not been told. Oil natural gas, &/or coal must be the 'bridge' fuels we use until scientists & engineers develop the alternatives that will replace those carbon emitting fuels. What happened in the Gulf is the direct result of another failure of government bureaucracy. That bureaucracy failed to demand BP comply w/ existing regulations. We need no new regulations. We need no new government agency. We need no new government employees. We need people to do their jobs. The same thing happened with the SEC when they failed to deal with the credit derivative markets & with people like Bernie Madoff.

      When government gets 'too' big, its incompetence grows exponentially. What we have today with Social Security, Medicare, Medicaid, SEC, Minerals Management Agency, the FED, and so many others, is now under construction to become incredibly incompetent & it will cost us a fortune, plus numerous lives.

    14. Pingback: Morning Bell: A Crisis of Competence in the Gulf | Conservative Principles Now

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