Congress Prepares to QUADRUPLE Tax on Oil

Meredith Jessup | May 24, 2010 9:39 PM

Even though the Obama administration, federal lawmakers AND BP have all insisted that BP will pick up the bill for the Gulf clean-up, Congress is getting ready to pass a massive oil tax increase for "clean up" purposes, according to the AP:

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.

An $11 billion tax hike. What are the chances this tax increase doesn't affect the middle class and upholds Obama's campaign tax pledge? Zero. While it's hard to estimate the average cost of an exceedingly rare oil spill, the clean-up of the Exxon Valdez cost the region an estimated $2.5 billion. Total costs--including fees, fines, penalties and claim settlements pushed the total to about $7 billion.

If BP is going to clean up the Gulf, as everyone claims, and the total cost of the clean-up isn't likely to come anywhere close to $11 billion, why do we need to QUADRUPLE gasoline taxes?

As we've learned, everything is not as it seems. It turns out the oil tax is just a small part of a much larger "$200 billion grab bag of unfinished business" for Democrats. Why am I not surprised?

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.