Friday, November 04, 2005

Senators Consider Windfall Profits Tax to Buttress Home Heating Aid for Poor

Northeastern Senators are considering a windfall profits tax on oil with the proceeds (estimated at nearly $3 billion) to be used to augment funding for the Low Income Home Energy Assistance Program (LIHEAP). Jack Reed (D-RI) is offering the legislation, a proposal for a one-year tax designed to kick in when oil prices exceed $40 per barrel and half a dozen Democratic Senators plus Republicans Judd Gregg (NH) and Susan Collins (ME) are endorsing the proposal. While Finance Chair Charles Grassley (R-IA) has called on oil companies to voluntarily donate monies to LIHEAP, he does not believe in a windfall profits tax. Additionally, little or no enthusiasm for such a tax has been voiced by members of the House of Representatives.

I can understand frustration with the high fuel prices of early autumn (though they have moderated significantly in the last two or three weeks) and can also understand the concern that low income and elderly citizens may have difficulty affording higher heating costs. Having said this; I am skeptical of any tax claiming to only last for one year; it is amazing how many such taxes in the past have become permanent or semi-permanent.


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