A New Cash Cow for the GOV

[Paslode]

Ought to do wonders for out already thriving economy.

http://www.breitbart.com/article.php...show_article=1

Oil tax increase would help pay to clean up spills
May 24 04:20 PM US/Eastern
By STEPHEN OHLEMACHER
Associated Press Writer
WASHINGTON (AP) - Responding to the massive BP oil spill, Congress is getting ready to quadruple—to 32 cents a barrel—a tax on oil used to help finance cleanups. The increase would raise nearly $11 billion over the next decade.

The tax is levied on oil produced in the U.S. or imported from foreign countries. The revenue goes to a fund managed by the Coast Guard to help pay to clean up spills in waterways, such as the Gulf of Mexico.

The tax increase is part of a larger bill that has grown into a nearly $200 billion grab bag of unfinished business that lawmakers hope to complete before Memorial Day. The key provisions are a one-year extension of about 50 popular tax breaks that expired at the end of last year, and expanded unemployment benefits, including subsidies for health insurance, through the end of the year.

The House could vote on the bill as early as Tuesday. Senate leaders hope to complete work on it before Congress goes on a weeklong break next week.

Lawmakers want to increase the current 8-cent-a-barrel tax on oil to make sure there is enough money available to respond to oil spills. At least 6 million gallons of crude have spewed into the Gulf of Mexico since a drilling rig exploded April 20 off the Louisiana coast.

President Barack Obama and congressional leaders have said they expect BP to foot the bill for the cleanup.

"Taxpayers will not pick up the tab," Senate Majority Leader Harry Reid, D-Nev., said Monday.

BP executives told Congress last week they would pay "all legitimate claims" for damages. But the government needs upfront money to respond to spills, as well as money to pay for cleanups when the responsible party is unable to pay, or is unknown. Money spent from the fund can later be recovered from the company responsible for the spill.

The Oil Spill Liability Trust Fund has about $1.5 billion available. Under current law, only $1 billion can be spent from the fund on a single incident. The bill would increase the spending limit to $5 billion.

The U.S. Chamber of Commerce said the tax increase was hastily put together, without adequate study, to help pay for an unrelated bill. The tax increase was unveiled Thursday, without any congressional hearings to study its impact.

Even with the tax increases, the bill is projected to add $134 billion to the federal budget deficit.

"I have seen no analysis on how this would impact energy security, how this would impact domestic production, how this would impact the overall economics in the country," said Christopher Guith, vice president of the chamber's energy institute. "There hasn't been any sort of deliberation on this."

The American Petroleum Institute has not taken a position on the tax increase, though a spokeswoman said Congress should study the ramifications before acting.

"We understand we need to have an insurance policy in order to cover people in the event of a spill," said the spokeswoman, Cathy Landry. "At the same time we need to have a vital oil and gas industry."

The bill does not address a federal law that caps liability at $75 million for economic damages beyond direct cleanup costs. Democratic Senators tried to pass a bill last week that would have increased the cap to $10 billion, but they were blocked by Republicans.

The oil industry says such a high cap would make it difficult, if not impossible, to insure oil rigs.

BP said Monday its costs for responding to the spill had grown to about $760 million.

___

The bill is H.R. 4213

Congress: http://thomas.loc.gov

[The Reaper]

This tax will be immediately passed directly to consumers in the form of higher gas prices and the Federal government will spend it elsewhere.

TR

[JJ_BPK]

Originally Posted by The Reaper

This tax will be immediately passed directly to consumers in the form of higher gas prices and the Federal government will spend it elsewhere.

TR

Let me guess???

$0.23 per barrel
55 gals in a barrel
$0.004191919191919191919192 per gal

At the pump,, $0.50 increase??

[Guy]

Originally Posted by The Reaper

This tax will be immediately passed directly to consumers in the form of higher gas prices and the Federal government will spend it elsewhere.

Why, the majority of people that do not understand this amazes me?

Stay safe.

[Pete]

Originally Posted by JJ_BPK

Let me guess???

$0.23 per barrel
55 gals in a barrel
$0.004191919191919191919192 per gal

At the pump,, $0.50 increase??

I do believe a bbl is 42 gallons of which you can get about 23 gallons of gas.

And note this is a rider on another bill.

And also what starts little is easy to change higher.

And remember, this is in addition to the Fed Tax paid at the pump.

[rubberneck]

You mean there is no such thing as a free lunch? The fact that people in this country don't understand that corporations don't pay taxes is beyond me. Taxes are a cost that they build into the cost of the goods or services that they provide. Raise taxes on corporations and their customers foot the bill. The cynical part of me knows that the Democrats know this but because the tax is hidden in the form of higher costs they can get away with saying they made corporations pay their fair share, knowing full well they just screwed the people they claim to care most about.

[Pete]

Originally Posted by rubberneck

....... The cynical part of me knows that the Democrats know this but because the tax is hidden in the form of higher costs ...........

Just wait until they pass the VAT.

And get the complicated system that the Brits have. Items will or will not have the VAT depending their "intended" use. So a massive government program is established to sort it out and thousands of "advocates" grease politician's hands to make sure things go their way.

[LarryW]

Sorry, all, but this crap is chapping my a$$. I'm up to here with disasters being addressed by our Gov't via "Congressional Investigations" and "Official Inquires" when absolutely nothing comes out of them. It's been like that for years and crosses all party and state affiliations. Whether its talking to mine disaster survivors, air traffic controllers, financial big wigs, or fishermen along the Gulf seems all we see are a bunch of Congressional and POTUS limp weeds asking questions a 10 yr old could improve on, then pounding the desk and burbling into their microphones that "this is terrible", "the People are not going to take it anymore...blah, blah, blah". And when it's over they do nothing about it. Windbags. All of them. Does "lips on a chicken" mean anything...?

Question: If your Team entered a third-world community to help a citizenry which had this kind of Government/representation, how would you advise the locals to improve their condition? (My guess is that the bums would be relegated to mucking out the stalls of animals the people didn't care about.)

(Rant and burbling over...)

[Last hard class]

It seems to me that BP should pay for this. They were profiting from the well until the explosion. It's Unfortunate that their economic damage liability is capped at $75 million per occurence. The vote to raise the cap last week failed to pass because Lobbyists successfully argued that insurance for the off shore oil rigs would become more expensive? No kidding? Exploding platforms that leak 10m gallons of oil will do that.

At the end of the day, $75m of economic damages will be a drop in the bucket. So, the taxpayers were going to get hit for this no matter what. Privatize profits and socialize losses. It's the new American way. Now, the liability cap can be pierced if BP is proven to be at fault. But that means adding on an army of lawyers. ( That really is the american way)

I feel sorry for the people who's livelihoods will be affected by this mess.

Lobbyists= suck canal water



Almost forgot. I just bought some BP stock at $41. Looks like a good investment.

[rubberneck]

Originally Posted by Last hard class

Privatize profits and socialize losses. It's the new American way. Now, the liability cap can be pierced if BP is proven to be at fault. But that means adding on an army of lawyers. ( That really is the american way)

I understand your frustration but do you believe that the US public has benefited from having access to cheaper gas all the years that this and other gulf platforms have been in operation? If I were a betting man the additional cost of cleaning this mess up above and beyond the hard cap is more than offset by the economic benefit gained from cheaper gas.

If the government tells the oil companies that they now have unlimited liability it is going to negatively impact the price of crude oil. Since companies don't pay taxes or costs out of their own pockets but rather it is passed on to the consumer they won't feel the pinch but you will at the pump. If we suffer one of these major spills once every 25 years the public still comes out better economically by caping the liability instead of having to pay a premium on gas every year to cover the potential expense of a major event that very rarely occurs.

[Pete]

When was the last time a well blew out and fouled a large area of our coast?

What was it? 1969? 41 years ago? Whole lot of taxes can be raised and spent in 40 years.

How many wells are in operation around our coastline? Seems a pretty safe operation to me.

And if one of Cuba's wells in the Florida Straights blows out? Who will pay for that one? Cuba? China?

With all our warts I think it's better to do it under our laws.

[echoes]

Originally Posted by LarryW

Whether its talking to mine disaster survivors, air traffic controllers, financial big wigs, or fishermen along the Gulf seems all we see are a bunch of Congressional and POTUS limp weeds asking questions a 10 yr old could improve on, then pounding the desk and burbling into their microphones that "this is terrible", "the People are not going to take it anymore...blah, blah, blah". And when it's over they do nothing about it. Windbags. All of them.(Rant and burbling over...)

No need to end the Rant Larry, am right there with you, and so are a lot of folks in my AO! Your post sums it up for me, agree 100%!

Going to get out my bowl of Cheerios for dinner tonight...

Holly

[Last hard class]

I find it hard to believe someone who looks exactly like President Reagan is advocating a larger government role via a tax increase.

Originally Posted by rubberneck

do you believe that the US public has benefited from having access to cheaper gas all the years that this and other gulf platforms have been in operation?

Agreed. Absolutely.

While I would like to see us rotate to alternative energies. I fully understand the need to continue off shore and on shore drilling until we get to the promised land.

Originally Posted by rubberneck

If the government tells the oil companies that they now have unlimited liability it is going to negatively impact the price of crude oil. Since companies don't pay taxes or costs out of their own pockets but rather it is passed on to the consumer they won't feel the pinch but you will at the pump.

I would argue that the cost of crude will go up regardless of who pays this tab. The question is should it be a penny per gallon on all gas from a tax or two pennies per gallon of BP gas that they pass on to their customers?

In a free market, should not BP's rivals have a competitive advantage because their platforms don't have problems? Isn't economics (profits) the ultimate driver that will push BP to put systems in place that will help prevent this from happening again? If BP decides to pass the costs on to the consumer, the consumer can fill his tank up down the street for less. If BP wants to be competitive at the pump then their margins shrink. That is how it should work. This tax takes away the impetus for BP or anyone else to change their ways.

Why does it have to be unlimited liabilty? My point is the current cap is too low. By the government picking up the cleanup tab, you are spreading the cost out to everyone. That shouldn't happen until BP has exhausted more of it's resources.

[rubberneck]

Originally Posted by Last hard class

In a free market, should not BP's rivals have a competitive advantage because their platforms don't have problems?

But they do. BP is out the $75 million dollar cap, plus the cost of rebuilding (if allowed to at all) the platform, the millions of barrels of crude that is now floating around the gulf of Mexico that can't be sold by BP and the money they will lose in the dozens of lawsuits sure to follow. When it is all said and done I'd be shocked if it didn't cost them close to a billion dollars. I'd say that their rivals have an economic advantage because they don't have any of those costs.

Isn't economics (profits) the ultimate driver that will push BP to put systems in place that will help prevent this from happening again?

That platform just won an award for safety from the current administration and passed all of it's annual inspections. What makes you think they could have prevented this in the first place? From what I have read it was just one of those freak things that was beyond their control.

[GratefulCitizen]

We need not worry about more oil spilling out.
The president has come upon a solution:

http://thehill.com/blogs/blog-briefi...-the-damn-hole

Concur.
The nation would be much better off if the president would just put a cork in it.