*GOP Blocks Measures Boosting Taxes on Oil Companies' Profits*

[Guest guest]

As long as we have two oil men in the White House and REPUBLICANS in

charge of Congress, we will never have any relief from the oil

companies' price gouging.

 

(Two oil men in the white house or two in the white house owned by oil men?)

 

 

 

------

 

*GOP Blocks Measures Boosting Taxes on Oil Companies' Profits*

 

Provisions Passed by Senate Would Raise About $5 Billion

 

by Jonathan Weisman

The Washington Post

April 26, 2006

 

<< While Republican leaders sharply criticize soaring gasoline prices

and energy industry profits, GOP negotiators have decided to knock out

provisions in a major tax bill that would force the oil companies to pay

billions of dollars more in taxes on their profits.

 

House and Senate tax writers have been struggling to reach an accord on

separate tax bills approved last year to extend some expiring tax cuts

enacted during President Bush's first term. But House Republicans have

raised strong objections to Senate-passed provisions that would raise

nearly $5 billion in taxes over five years -- primarily by changing

arcane accounting rules that have allowed oil companies to substantially

lower their tax bills, according to House and Senate tax aides familiar

with the talks.

 

The actions of REPUBLICANS hashing out a tax bill behind closed doors indicate

that, despite tough talk from the White House and Capitol Hill, the party is

NOT ready to hit the oil companies hard -- even on measures that have broad

support in the Senate.

 

House Majority Leader John A. Boehner (R-Ohio) made it clear yesterday

that the leadership would only go so far in punishing an industry

enjoying record-breaking profits if that punishment could have broader

negative consequences. In January, Exxon Mobil Corp. alone reported the highest

corporate profit in U.S. history: $10.71 BILLION for the

fourth quarter of 2005 and $36.13 BILLION for the entire year.

 

" The windfall profits [tax], when it was tried in the '80s, failed

miserably because it led to less discovery. It led to less production

and was a failure, " Boehner said. " There is no reason for us . . . to go there

again. "

 

 

 

 

Since Congress returned to Washington this week, lawmakers under

pressure from angry constituents have threatened to take action against the oil

companies. With crude oil prices well over $70 a barrel, Sens. Byron L. Dorgan

(D-N.D.) and Christopher J. Dodd (D-Conn.) vowed yesterday to push for a vote in

the coming days on a 50 percent excise tax on profits on oil selling for more

than $50 a barrel. Sen. Arlen Specter (R-Pa.) has suggested a similar tack.

 

Even Bush called on Congress yesterday to temper one small provision in last

year's energy bill that offered oil companies a quick tax write-off of the costs

of oil exploration.

 

" Record oil prices and large cash flows also mean that Congress has got to

understand that these energy companies don't need unnecessary tax breaks like

the write-offs of certain geological and geophysical

expenditures, " he said .

 

But in the CLOSED-DOOR talks on tax legislation, there has been NO

such sentiment in dealing with two of the three Senate provisions that

would boost federal taxes on the oil industry.

 

The biggest of the provisions would change accounting rules that apply

to oil in storage. Currently, oil companies are allowed to calculate the taxable

value of their inventories based on the value of the oldest stocks, when oil may

have been worth $30 a barrel. But much of the inventory may have been pumped

from the ground when oil was selling for more than double that. Critics say that

understates the value of the companies' oil supplies purely to lower their tax

payments.

 

Another would prevent oil companies from deducting from their U.S. taxes the

royalties paid to foreign governments.

 

The third, which would repeal the provision in last year's energy law

allowing companies to write off in two years the cost of geological

exploration, received new life after Bush's speech, Senate tax aides

said.

 

Those measures were first proposed by Sen. Olympia J. Snowe (R-Maine) to

pay for a $500 tax credit to defray home energy costs. In letters to

Senate Majority Leader Bill Frist (R-Tenn.) and House Speaker J. Dennis

Hastert (R-Ill.), Snowe suggested yesterday that the Senate oil tax

measures be taken out of the broader tax bills and passed separately to

pay for alternative-energy development.

 

But the Bush administration has strongly opposed Snowe's measures from

the start, especially the accounting change, which would hit the five

major oil companies to the tune of $4.3 billion in two years. In letters

to Congress on Feb. 23, Treasury Secretary John W. Snow used underscored

text to stress that " the President's senior advisors would recommend

that the President veto the legislation if this provision remains. "

 

The tax change Bush spoke of yesterday is less dramatic than it may

seem, oil industry tax analysts said. The Senate had hoped to repeal the

quick write-off of exploration costs, but Bush merely wants to stretch

it out from two years to five years, as proposed in his February budget

plan, according to Mark Kibbe, senior tax policy analyst with the

American Petroleum Institute.

 

" We would not necessarily be opposed to that at all, " Kibbe said.>>

 

 

Read this at:

http://www.washingtonpost.com/wp-dyn/content/article/2006/04/25/AR2006042501738_\

pf.html

 

 

 

 

" To be nobody-but-myself in a world which is doing its best, night and day, to

make me everybody else - means to fight the hardest battle which any human being

can fight, and never stop fighting. " -e.e. cummings-