quote:The money collected over 10 years would provide tax breaks for wind, solar and other alternative energy sources and for energy conservation. The legislation, approved 236-182, would cost the five largest oil companies an average of $1.8 billion a year over that period, according an analysis by the House Ways and Means Committee. Those companies earned $123 billion last year.
The bill would repeal tax breaks that oil companies get, so, yes it could be labeled as a tax break, it's really just making them pay a tax that until now they've gotten a reprieve from. Parse it however you want, these aren't "new" taxes.
It's still just in the House, but the Senate leadership is using fast tracking procedural efforts to get it past a Republican fillibuster. Bush has already promised a veto, which will likely be sustained. I think this will be campaign fodder for the Left in the upcoming elections. It's going to make the Right look anti-environment and pro-big oil.
The Left wants to use the money from the tax revenues to renew the renewable energy tax credit, set to expire at the end of 2008, and a host of other efficiency tax breaks for homes, businesses, etc.
Now, the argument for it is obvious I would think. Oil is an established industry that doesn't need help to keep going, whereas renewables are largly just starting out, and for that matter, oil is on the way out, though it might be awhile, whereas renewables just may be the future of the nation. Billions are being spent in private investments on renewable energy, and much of that hinges on the tax credit, which will get renewables built large scale, and eventually, sometime in the near future (and in some cases actually, right now) their price will come down to the point where credits aren't needed. For more info on that, visit the Green Energy thread, daily breakthroughs are being made, it's not "20 more years and we'll have it!"
The argument against? The tax would unfairly target a single industry just for being successful, and that's not really fair.
My own take, is that it wouldn't be fair to target a single industry just because they're doing well. But the tax breaks were put there to begin with so oil companies would have a little help with the cost of exploration of oil. That was back when oil was in the $30s and $40s. Now it's over $100 a barrel. In that time, US oil companies were also charged with shorting the US government on royalties, and gas prices have shot through the roof. Oil companies, adjusted for inflation, actually spend less on exploration today than they did in the 70's. The fact of the matter is, they just don't need the break to do their free market work anymore. The government gives these kinds of tax breaks to help struggling industries, can ANYONE argue that the oil companies are struggling, or that they need any sort of help? I don't think so. It's not even that big a tax credit comparatively. They made $123 billion last year. This tax is $1.8 billion a year for all the companies combined. They'll survive.
Anyone who has read the Green Thread knows that I'm fairly biased on this issue, though not necessarily against "oil" companies. I think those companies are making a transition to being "energy" companies. BP and Shell spent a lot on renewables last year. My problem isn't with oil companies per se. I am supportive of renewables, and I think it's silly that an industry that's been around for 100 years and is making record profits should get help while a struggling industry with hundreds of thousands of jobs on the line doesn't get help. There's something wrong there. So I wonder what Hatrack thinks of this.
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quote: BP and Shell spent a lot on renewables last year.
Does that mean big oil would get tax breaks on their renewable energy programs at the same time they are paying the new (old but previously not applied) tax?
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posted
Depends on where they are spending the money. But yes, pontentially, they could reap the benefits of the renewable energy tax credit whilst paying the new (yadda yadda) tax. But it's hard to phrase it that way. The RETC is already an existing credit due to expire, so, if it expired and they had renewable programs going, it'd end up being another tax hike on them.
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quote:Originally posted by Lyrhawn: and for that matter, oil is on the way out, though it might be awhile,
I'd love to see something that backs this up on anything shorter than a 5+ decade time scale (presuming that time scales on the order of generations are larger than awhile), other than your wishful thinking. Ignoring entirely the use of oil derivatives as fuels, you can't just turn off the use (for carbon reason, etc) since anything that depends on chemicals, which is essentially everything, also depends on oil. I'll point, out that this is just about everything that we eat. There is no reason to believe that the oil companies are going anywhere.
As for the tax cut, I'm not sure that it matters either way. 18 billion isn't really all that much.
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You seem to be assuming a hell of a lot from those 15 words.
I never said it'd be shorter than 50 years, or longer, I never said any specific timeline. I never said what would replace it. I never said it'd even be totally replaced. I never said oil companies are going anywhere.
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