Senate Republicans Block Profit Tax on Oil Companies

Last updated on July 1st, 2012 at 06:54 am

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By a vote of 51-43 Senate Republicans were able to block a bill that would have rolled back $17 billion dollars in tax breaks and placed a windfall profits tax on the largest oil companies. The bill would have used the money from the tax to develop alternative energy.

The bill also would have made oil and price gouging a federal crime a presidentially declared emergency with the penalty being a $5 million fine, and it would have authorized the Justice Department to bring price fixing charges against OPEC member countries. In an attempt to discourage speculation, traders would have been required to put up more collateral in the energy futures market.

Republicans believe that the answer to this problem is in increasing domestic production, “We have a better plan for addressing gas prices, one that respects the laws of supply and demand. In addition to the two provisions I’ve already mentioned, our bill mandates that billions of gallons of coal-derived fuels be produced through clean coal technologies as a way of further reducing our dependence on foreign sources of oil,” Senate Minority Leader Mitch McConnell (R-KY) said.

By invoking the free market, McConnell and the Republicans who agree with him are supporting the oil companies. My question is, aren’t the $17 billion in tax breaks that the oil companies receive also a violation of free market principles? The Republican idea of increasing domestic production ignores the reality of supply and demand.

The nation can’t supply enough domestic oil in a cost efficient manner to meet its demand. The phony supply and demand argument is only meant to provide cover for those Senators in the GOP who choose to side with big oil over the American consumer.

You can read McConnell’s full remarks on the Senate floor right here.