GOP proposes $100 gasoline rebates
WASHINGTON – Responding to an election-year spike in gasoline prices, Senate Republicans on Wednesday drafted legislation providing $100 rebates for taxpayers as key lawmakers sought access to Big Oil’s income tax returns.
The rebate legislation also calls for oil drilling in the Arctic National Wildlife Refuge, an intensely controversial proposal that will probably contribute to the defeat of the overall measure.
Other elements of the package would provide additional tax rebates for manufacturers of hybrid vehicles and urge President Bush not to add oil to the nation’s strategic petroleum reserve for six months.
A vote was possible by week’s end.
Republicans filed their bill several hours after the Senate Finance Committee announced an investigation into the taxes paid by major oil companies, which reported record profits last year. The committee asked the Internal Revenue Service for the firms’ tax returns.
Sen. Charles Grassley, R-Iowa, the committee’s chairman, said the panel was concerned about high company profits and executive compensation.
“I want to make sure the oil companies aren’t taking a speed pass by the tax man,” he said in a statement.
“It’s relevant to know what the real financial picture is for this industry,” said Montana Sen. Max Baucus, the ranking Democrat on the committee.
Bush earlier this week halted filling of the nation’s emergency oil reserve, urged the waiver of clean air rules to ease local gas shortages and called for the repeal of $2 billion in tax breaks for profit-heavy oil companies.
He also urged lawmakers to expand tax breaks for the purchase of fuel-efficient hybrid automobiles.
Democrats, too, have called for measures to ease the impact of higher prices. Sen. Bob Menendez, D-N.J., has called for a 60-day suspension in the federal gasoline tax, a holiday that he says will 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.
Officials said the GOP proposal envisions a rebate of $100 per taxpayer, payable by government check.
In a letter to IRS Commissioner Mark Everson, Grassley and Baucus said, “As pressure mounts to address extraordinarily high gas prices that consumers are facing at the pump, we feel we should better understand the federal tax posture of the industry.”
The senators noted not only the industry profits, but “an extremely lucrative retirement plan by one oil and gas industry executive, benefits which may have been subsidized in part by the taxpayers.”
The retirement compensation package given by Exxon Mobil Corp. to outgoing Chairman Lee Raymond is said to total $400 million when all pension payoffs and stock options are included.
A House-Senate conference, negotiating a large tax bill, is considering a provision that would change accounting rules for oil inventories and require the five biggest oil companies to pay $4.3 billion more in taxes.