Tuesday, May 17, 2005

Kucinich Introduces Bill to Tax Windfall Profits of Oil Companies

Here's one politician who "gets it" at least partially.....

Provides tax benefit for purchasers of high efficiency American-made cars, subsidies for mass transit

On May 4, Congressman Kucinich and 33 cosponsors introduced in the House of Representatives H.R. 2070, the Gas Price Spike Act of 2005. The Bill has been referred to the House Ways and Means Committee and to the House Transportation and Infrastructure Committee.

This legislation provides for a windfall profit tax on oil and natural gas (and products thereof), allows an income tax credit for purchases of fuel-efficient passenger vehicles made in the United States, and provides grants for operators of mass transit systems to lower fares during gas price spikes.

Oil companies should not profit excessively from the increasing scarcity of our natural resources

Windfall profits are profits due to outside circumstances - not directly under the control of the energy company - which exceed a reasonable profit level, to be established by an appointed board whose members have no financial interest in any of the affected companies.

The windfall profits tax on oil companies would be:

Half of the profit between 100% and 102% of what's determined to be reasonable; and
Three-quarters of the profit between 102% and 105% of the reasonable level; and
All of the profit which is 105% or more of the reasonable level.
Cleaner and more efficient cars, American jobs and money in the bank

To qualify for a tax credit, a vehicle would need to be a new car, truck or sport-utility vehicle (SUV) purchased for non-business use and assembled in the United States by workers employed under a collective bargaining agreement which gets at least 45 miles per gallon (MPG) of fuel (35 MPG for trucks and SUVs).

The tax credit allowed per taxpayer per year would be:

$6,000 for cars getting 65 MPG or more (trucks/SUVs 55 MPG plus), or
$4,500 for cars getting 55 MPG or more (trucks/SUVs 45 MPG plus), or
$3,000 for cars getting 45 MPG or more (trucks/SUVs 35 MPG plus).
These would not be mere deductions, but credits off the bottom line income tax of purchasers.

Mass transit needs to be easier and cheaper

Fare reductions would need to be applied equally to all passengers using a mass transit system. Grants would be funded by revenue from the windfall profits tax on oil and gas companies, to the extent that revenue remains after funding of tax credits for purchasers of fuel-efficient vehicles.

Kucinich Insight on Environment and Energy

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