Congress Watch: Senators hope to strip oil taxes from Katrina bill
Senators worried that new Senate-backed taxes on oil and gas firms will boost prices at the pump and curb exploration believe their effort to strip the provisions from Katrina Emergency Tax Relief Act of 2005 is moving forward. "There's talk of getting them stripped out in House-Senate conference," says a lobbyist who is working the issue. But, he hedged, "no one really knows for sure."
The tax provisions are not in the similar House bill. The antitax lobbying effort began yesterday when 13 senators, many from oil states, sent a two-page letter to the heads of the House and Senate tax committees. The letter warns that Section 561 of the Senate bill would require companies to revalue their inventory to increase tax liability. And, they add, Section 571 would limit the use by those same companies of the foreign tax credit, "thereby exposing them to double taxation."
The effort is to expand later this week as tax opponents warn that the provisions will hurt American consumers and give an advantage to foreign oil competitors, especially in France, Russia, and China, where some are subsidized or even state owned. The letter warns that in addition to raising prices at the pump to cover the provision, Americans will be hurt in the wallet by shrinking energy company share prices held by many 401(k) retirement portfolios.
"These provisions simply are not good policy," say the 13.
"The reason why these folks are so whipped up about this," says the lobbyist, "is due to the fact that it amounts to tax increases on energy companies and undercuts U.S. companies competing against government subsidized companies in Russia, France, and China."
advertisement
