Obama May Levy $15 Billion Tax on Oil Company Profit

Friday, May 2, 2008

Democratic presidential candidate Barack Obama’s proposal for a windfall profits tax on oil companies could cost $15 billion a year at last year’s profit levels, a campaign adviser said.

The plan would target profit from the biggest oil companies by taxing each barrel of oil costing more than $80, according to a fact sheet on the proposal. The tax would help pay for a $1,000 tax cut for working families, an expansion of the earned- income tax credit and assistance for people who can’t afford their energy bills.

“The profits right now are so remarkable that one could trim them 10 percent or so, which would turn out to be somewhere in the $15 billion range,” said Jason Grumet, an adviser to the Obama campaign.

Obama’s plan may be three times larger than the $50 billion, 10-year plan contemplated by his Democratic rival, Hillary Clinton.

Oil companies would still have ample reason to “continue to pursue production, while at the same time providing relief to consumers,” Grumet said.

A flurry of energy proposals from presidential candidates and lawmakers has come after crude oil futures prices reached $119.93 a barrel on April 28. Retail gasoline prices hit a record $3.603 a gallon this week, according to the U.S. Energy Department.

This entry was posted in Barack Obama, Election 2008, News and tagged , . Bookmark the permalink.

22 Responses to Obama May Levy $15 Billion Tax on Oil Company Profit

  1. FranIAm says:

    Oh- if only, please, if only.

  2. Scott Dancer says:

    As a real estate agent/broker, I travel with clients to properties and incur the costs of gasoline. It’s just part of the game.

    But the fact is, in southern San Mateo and northern Santa Clara counties, gas is $3.89 a gallon. A record high and with the real estate business slowed to a crawl, these prices are having a terrible impact on my business.

    I rarely drive anymore if it isn’t related to my business. No more weekend drives to the coast and I haven’t driven to San Francisco in months.

    Obama’s plan to hit the U.S. oil industry with an excess profit tax is perfectly brilliant. Contrary to their whining, my guess is an excess profit tax will spurn the oil business to increase production and end what I see as price fixing on their part. All I know is this can’t go on much longer.

  3. Harry says:

    Something has to be done about the gas prices. Bush is hording everything we get from Canada and Mexico for his Iraq war.

  4. Great idea. Funnel that $15 billion into alternative energy research. It’s an unsexy topic that the media hates, but we ALL suffer (yes, even you, wingnuts) when the environment is irrevocably altered.

  5. Diane says:

    By tomorrow the oil companies will be running ads claiming this will drive prices higher with the support of the GOP

    Wake up, America

  6. JIm says:

    It’s about time that oil companies were asked to share some of their enormous profits, since they have yet to reinvest even a portion of their record profits to repair any oil rigs destroyed from hurrican Katrina.

  7. TOM339 says:

    USAToday has a piece today that says the cost of food has risen 45% in 9 months.

    The situation can’t go on like this if the country is going to avoid a depression.

    Where is the leadership in Washington? Neither party seems capable of addressing the problems threatening to destroy us.

  8. Obama’s plan is farsighted and strategic….and will the media give it the Airplay it needs ? nooooooo they would rather show Queen Pantsuit at the pump in a trumped up photo-op….The American Public gets it- that gas is averaging 3.69-3.89 across the country….and that food is through the roof…..and that it is ALL connected….NONE of this would be happening if we were NOT in Iraq…..

  9. Brian says:

    Scott said “Obama’s plan to hit the U.S. oil industry with an excess profit tax is perfectly brilliant. Contrary to their whining, my guess is an excess profit tax will spurn the oil business to increase production “. It might “spurn” them to increase FOREIGN oil production. Why would they do it here if they have to pay more taxes? The government already makes more money per gallon of gas then the companies that produce it do!!!

  10. Randy Arroyo says:

    As I read Obama’s plan, it’s the portion of profit above $80 a barrel that would receive the excess profit tax. So under today’s market conditions, the portion between $80 to $120 — roughly $40, would all go back to the US Treasury. If you don’t think this would motivate EXXON to reduce prices below $80 a barrel, think again.

  11. Afrit007 says:

    Good idea, but who do you think is really going to pay for it? If you think Big Oil is just going to bend over and take this, think again. As usual, they’ll pass the cost on to us, the consumers, and continue to rake in the profits.

  12. Kurt says:

    I understand your skepticism, but the whole idea of taxing the over $80 a barrel profits is precisely so they WON’T pass the cost on to us.

  13. this “gas tax” holiday that McSame and Hillary want is a complete and total joke — at best someone will save $50 for the summer. pretty soon that will buy a can of tuna and loaf of bread

    besides the windfall tax on oil companies that obama wants — we have to get the hell out of iraq and take that money and spend it on alternative energy, education and keeping the environment clean.

    for when we pollute this planet beyond redemption — no amount of newly found oil or alternative energy will mean shit if we are dying from our own dirt.

    bush’s blunders have SO ruined this economy, i dont know if anyone can bring it back

  14. libhomo says:

    I see that the oil company PR people are blogging away. LOL

    I’m delighted that the Dems are starting to compete to make Big Oil pay a little closer to it’s fair share in taxes. You go Obama!

  15. Cali Tejano says:

    $3.55 a gallon for gas? Geez, Chris. Where are you buying your stuff from?

    Seriously, I’m glad Barack Obama came out with this. Even if it doesn’t become reality, at least it’s a starting point for real debate on this topic.

  16. kid says:

    Hey Man,

    I want to know if I can put you on my blogroll ?I like your site . I’m glad you’re on OUR side. Later.

  17. And then take that $15 mil into research for alternative energy sources. It would be probably around $14 mil more than the current administration has put into research.

  18. feminazi says:

    Obama is correct, again. Tax Big Oil’s profits above $80 dollars and they will have no motivation to raise prices. In fact, I would think prices would drop below the $80 threshold. I bet Big Oil is going nuts just about now. They’ve grown comfortable having a Bush puppet in the White House these past 8 years.

  19. NoObama says:

    What a dumb idea. The oil companies will just charge the extra on consumers. There is no free lunch. The oil profits as a percentage have not gone up. The reason the price per barrel is escalating is because the dollar has dropped nearly 50% in value the past eight years.

    Obama, Clinton, McCain and Bush either don’t understand economics or just don’t care. The reckless domestic social and foreign spending is destroying the dollar. Taking excess profits isn’t going to do anything but encourage more govt. spending which is the core problem.

  20. The ‘free market’ is an illusion a very effective propaganda spewed across the globe extolling the precepts from the gospel of the “The Free Market” preached by the Economic ministers of the faith.

    No more interpreting of illusion is necessary. It’s now time for action!

    Review my articles:
    A Green Future for Our Nation
    Benefits of Nationalized Oil Industry
    Nationalize the Oil Companies
    Economic Society

    At–> http://structuraleconissues.blogspot.com

    For a better understanding of what where facing.

    It is now time to make certain that everyone understands the truth, solutions, and what will happen if we fail to act now.

  21. Daniel From CA says:

    The government does not allow oil exploration, then when supply gets short, they blame the oil companies. If the government really wanted to stick it to the oil companies, they would flood the market with oil and drive down the price causing profits to be much lower.

    BUT, the government does not want you to use more oil, so they restrict supply, and then they act shocked with demand causes the price to go up.

  22. Daniel From CA says:

    BTW- in case you don’t remeber, this EXACT SAME THING was enacted by Jimmy Carter, the 1980 Windfall Profits Tax, and it caused massive fuel shortages, record high gas prices (in todays dollars 2.56 per gallon, when oil was only $20 a barrell), and long lines at the gas pump.

    I repeat, EXACT SAME THING. Jimmy set the price at $18 per barrell and and everything over was taxed 70%. What happened was domestic production came to a hault and our dependance on foreign oil jump 16%.

    Just think, now that our depenace on foreign oil is well above 50%, how much will it jump this time if this tax is enacted.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s