WASHINGTON -- Senate Republicans advocate sending $100 rebate checks to millions of taxpayers, and a Democrat is leading the campaign for a 60-day gasoline tax holiday, reported the Associated Press.
A vote is possible as early as this week on the Senate GOP approach, which calls for $100 rebate checks for taxpayers to cushion the impact of higher gasoline prices. The measure seems unlikely to prevail, AP said, at least initially, since it includes a highly controversial proposal to open a portion of Alaska's Arctic National Wildlife Refuge to oil drilling.[image-nocss]
Senate Republicans also favor extending a tax break that manufacturers receive for each hybrid vehicle they make, and want President Bush to suspend deliveries to the nation's Strategic Petroleum Reserve (SPR) for six months.
Democrats seemed caught off guard by the GOP maneuvering, said AP, but a spokesperson said they would have a plan of their own.
Senator Bob Menendez (D-N.J.) has proposed a 60-day suspension in the federal tax on gasoline and diesel, a holiday that he says would cut the cost of gasoline by more than 18 cents a gallon and reduce the price of diesel fuel by more than 24 cents a gallon.
Meanwhile, the Senate Finance Committee requested tax returns from the country's major oil and gas companies as part of an investigation into industry profits and soaring gasoline costs. Sen. Charles Grassley (R-Iowa), the committee's chairman, said senators were concerned about the record profits and significant executive compensation in the oil and gas industry. I want to make sure the oil companies aren't taking a Speedpass by the tax man.
Click here to view Grassley's statement.
With gasoline prices soaring and oil companies announcing record profits, it's relevant to know what the real financial picture is for this industry, added Sen. Max Baucus (D-Mont.), the panel's ranking Democrat.
It is highly unusual for the Senate committee to seek corporate tax records. The last time it made such a request to the IRS it involved the tax records of the bankrupt Enron Corp.
On Tuesday, President Bush suspended filling of the SPR, urged the waiver of clean air rules to ease local gasoline shortages and called for the repeal of $2 billion in tax breaks for oil companies. He also urged lawmakers to expand tax breaks for the purchase of fuel-efficient hybrid automobiles.
Both Republicans and Democrats said they planned to support rescinding the $2 billion in tax breaks, which 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. Executives of the major oil companies said at a recent hearing they do not need those tax breaks. House and Senate confereesas part of a broader tax packagewere also considering a measure that would change accounting rules involving oil held in inventory, which would force the five biggest oil companies to pay an additional $4.3 million in taxes.
The industry and the White House oppose that measure, viewing it as a form of windfall profit tax that singles out five companies for accounting practices widely used in and out of the oil industry.
Red Cavaney, president of the American Petroleum Institute (API), the major oil companies Washington-based lobbying group, said Wednesday oil company profits are huge because the industry is huge. In the oil and natural gas business size is everything, Cavaney said at a news conference. It is critical to understand that fact when looking at the operational financial performance of our industry.
Click here to view Cavaney's statement.
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