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Democrats Push Windfall Oil-Profit Tax

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The Associated Press

Published: May 8, 2008

WASHINGTON - Senate Democrats on Wednesday called for a windfall profits tax on oil companies and a rollback of $17 billion in oil industry tax breaks as part of an energy package. The proposal also would impose federal penalties on energy price gouging and calls for stopping oil deliveries into the government's emergency reserve.
Senate Republicans strongly oppose any additional oil industry taxes, which are widely viewed as having little chance of being enacted. They would almost certainly prompt a veto by President Bush.

The proposed 25 percent profit tax would apply only to windfall oil company earnings above what would be considered "reasonable" and only if the profit is not reinvested in refinery capacity expansion or renewable energy, according to a summary of the proposals.

The Democrats' energy package ignores recent calls by presidential candidate Sen. Hillary Rodham Clinton for a gasoline tax holiday to ease motorists' fuel costs. A fact sheet released by the Democratic leadership said "that can't be our first answer" and that the aim was to focus on longer-term solutions.

Democrats called for a halt in adding oil to the government's Strategic Petroleum Reserve, which is at 97 percent of capacity, until oil prices drop to $75 a barrel.

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