President Obama has been arguing for the repeal of certain oil company tax breaks for years, and it looks like the current hike in gas prices may provide the White House with a convenient opening:
After coordinating with the White House, Senate Democrats expect to consider, likely before the end of the month, legislation that would repeal tax breaks for oil and gas companies, a senior Senate Democratic aide said.
Details of the bill are still being decided, but the revenues could be used for consumer relief or to fund alternative energy initiatives, the aide said.
The aide said there are no easy energy solutions and that Democrats will continue to pursue the “all-of-the-above” strategy advocated by the White House.
Republicans argue that increasing the tax burden on oil companies is the last thing we should be doing during a time of high gas prices. “If someone in the administration can show me that raising taxes on American energy production will lower gas prices and create jobs, then I will gladly discuss it,” Senate Minority Leader Mitch McConnell said in a statement to Roll Call. “But since nobody can, and the president doesn’t, this is merely an attempt to deflect from his failed policies.”
While some Republicans maintain that repealing tax breaks for oil and gas companies will lead directly to higher gas at the pump, that claim is debatable. That said, higher taxes on oil and gas companies certainly don’t lead to lower gas prices or energy-sector job creation.
Which makes you wonder why the administration and Senate Democrats are touting this as a way of dealing with rising gas prices. According to Roll Call, Democrats are still considering whether the tax breaks would be used to pay for “consumer energy relief” or “alternative energy initiatives.” In other words, either flat-out election-year bribery with consumer energy rebates, or the subsidization of various Obama-approved “green energy” initiatives. None of which will address the underlying economic reasons behind the rising gas prices.
Republicans have had political success with the gas price debate so far, particularly by emphasizing the importance of pursuing domestic energy sources like the Keystone XL pipeline. But it sounds like Senate Democrats are preparing for another class warfare-tinged fight with the GOP, this time about tax breaks for mammoth oil companies. That could help Obama pivot back to the populist, tax-the-rich strategy that he was pursuing last fall.