Tax News

CCH (cch.taxgroup.com) reports:

  Senate Democratic leaders on May 7 unveiled legislation that specifically targets major oil producers by rolling back tax breaks and creating a windfall profits tax. The Consumer-First Energy Bill of 2008 would roll back $17 billion in tax breaks for oil and gas companies and create a 25-percent windfall profits tax on companies that fail to invest in increased capacity and renewable energy sources. The revenue gained would be invested in renewable energy development and energy-efficiency technology through a designated Energy Independence and Security Trust Fund.

  "Repealing tax breaks for Big Oil will stop these companies from running away with more taxpayer cash while they're already high on the hog," said Senate Finance Committee Chairman Max Baucus, D-Mont. "And, the money saved will help to build a real energy future for this country --one not dependent on foreign oil and fuels that won't last forever."

  In addition, the measure would halt government purchases of oil for the strategic petroleum reserve through December 2008, allowing filling to resume when the 90-day average price of crude oil recedes to $75 or less. The Consumer-First Energy Bill would also give the president authority to declare an energy emergency during a shortage, disruption or significant pricing anomalies in the oil market, would prevent traders of U.S. crude oil from routing transactions through off-shore markets to evade speculative limits and sets forth reporting requirements. The bill also would require the Commodities Futures Trading Commission to set a substantial increase in the margin requirement for all oil futures trades, contracts or transactions.

  By Jeff Carlson, CCH News Staff