Yesterday, we reported on attempts to reduce gas prices by President Obama by eliminating oil subsidies and by Dennis Kucinich (D-OH) who wants to place a windfall profits tax on oil companies through his Gas Price Spike Act.
The Kucinich bill would also give tax credits for the purchase of ultra efficient vehicles, and provide federal grants to reduce mass transit fares.
Yet Republicans countinue to argue this would constitute a tax increase on oil companies, which would reduce the industry’s competitiveness discourage domestic oil exploration.
Oil companies are reporting record profits for the first quarter of 2011 – increasing 50% or more over last year.
And this comes when Republicans are forcing drastic spending cuts across the board in programs that create jobs and provide necessary services to our economy and society.
Look to Venezuela
Venezuela announced it is imposing a windfall profits tax on royalties from oil projects when crude prices are above $40 a barrel. It will cost state and foreign oil companies up to $16 billion a year, depending on the price of oil.
President Hugo Chavez decreed the tax last week. The tax rises along with the price of oil: 20% at $40-$70 a barrel, 80% at $70-$90 a barrel; 90% at $90-$100; 95% if it tops $100 a barrel. The price for Venezuelan oil is currently $94.60 a barrel.
The resulting $9-$16 billon a year will go into a development fund, which will support social programs, improving health care, education, housing, agriculture and infrastructure.
Read about what’s causing higher gas prices:
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