Sens. Byron Dorgan of North Dakota and Chris Dodd of Connecticut have added their names to the expanding list of Democrats calling for Congress to impose a windfall profits tax on major oil companies.
The two lawmakers said they will ask the Senate before Thanksgiving to vote to levy a 50% tax on the excessive profits of oil companies, with the money to be directly rebated to consumers. They plan to offer their bill (S. 1621) as an amendment when the Senate considers tax policy during the budget reconciliation debate. The Senate is expected to take up the tax package in about two weeks, the senators said.
The bill would place a 50% excise tax on sales of crude oil at prices above $40 a barrel -- the average level reached last year. The tax would not apply to energy companies that invest their profits in new refinery capacity, renewables or to increase domestic oil and natural gas supplies, according to Dorgan and Dodd.
The senators' announcement comes a week after ExxonMobil Corp. reported record profits of nearly $10 billion for the third quarter. Shell, ConocoPhillips, British Petroleum and ChevronTexaco also posted significant increases in their quarterly earnings.
Sen. Charles Schumer (D-NY) introduced a bill last week to tax the windfall profits of large energy companies to raise money for Katrina relief and reduce the federal deficit, up to $60 billion over two years. Other Democrats have proposed anti-gouging measures (see Daily GPI, Oct. 31).
Republican Sen. Judd Gregg of New Hampshire, chairman of the Senate Budget Committee, also said it was time to take a "serious look" at reinstating an excess profits tax on oil companies, with proceeds going to pay for the Low-Income Home Energy Assistance Program (LIHEAP) and deficit reduction. He indicated that he would "pursue options in this area over the coming weeks," but he said he doubted it would generate much support from other Republicans.
At the urging of Senate Majority Leader Bill Frist (R-TN), leading energy executives will appear before a joint hearing of the Senate Energy and Natural Resources Committee and Senate Commerce, Science and Transportation Committee next week to answer questions about the run-up in energy prices. The hearing is scheduled for Nov. 9.
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