Senate panel wants oil company tax records

Grassley said Wednesday that high fuel prices revived the inventory tax plan and it “is still being negotiated.”

His House counterpart in the negotiations, Ways and Means Committee Chairman Bill Thomas, R-Calif., said the issue has not been decided. He denied he had rejected it.

Broad support for ending deals
Additionally, there is broad bipartisan support for scuttling other breaks given to oil companies only eight months ago when President Bush signed an energy bill.

Bush on Wednesday urged Congress to remove those tax provisions, worth $2 billion over 10 years. He said people should not pay for such subsidies when the industry is wallowing in cash.

Sen. Pete Domenici, chairman of the Senate Energy and Natural Resources Committee, promised to press hard to repeal the subsidies. Domenici, R-N.M., said he cannot support tax breaks for oil companies “while some American families are searching their budgets for the extra cash they need to fill their gas tanks.”

Sen. John Kerry, D-Mass., said he intended to offer legislation repealing the tax breaks. They included subsidies for exploration in deep waters of the Gulf of Mexico and in geologically or politically difficult regions of the world, as well as royalty relief for certain oil and gas exploration.

Oil execs say tax breaks aren’t needed
Executives of the major oil companies said at a recent hearing they do not need those tax breaks.

“They feel they are not necessary. We are not involved in trying to hold them in place,” Red Cavaney, president of the American Petroleum Institute, said Wednesday at a news conference.

Cavaney criticized the proposed changes on oil inventory accounting, calling them “equivalent to a windfall profits tax” for the five largest U.S. oil companies.

The Senate-passed plan would change accounting rules for oil kept in inventory. The changes would raise $4.3 billion in additional taxes from the companies over five years, according to a congressional analysis.

Fingering the Big Five
Cavaney said it was unfair to single out the five companies — ExxonMobil Corp., Chevron, BP, Shell and ConocoPhillips — for an accounting practice widely used both in and outside the oil industry.

Congressional Democrats see the uproar over the surge in gasoline costs as a chance to renew their push for a windfall profits tax.

“When ExxonMobil can realize billions of dollars of profits at the expense of millions of American families, it’s time to step up” and tax more of those earnings, said Sen. Richard Durbin, D-Ill.

A few Republicans, including Sen. Arlen Specter of Pennsylvania, have said a windfall profits tax ought to be examined, but most GOP lawmakers — and Bush — strongly oppose it.

It “failed miserably” when it was tried in the early 1980s, and there is no reason to try it again, House Majority Leader John Boehner, R-Ohio, told reporters.

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