Tax Relief Act of 2005

TAX RELIEF ACT OF 2005 -- (Senate - November 17, 2005)

BREAK IN TRANSCRIPT

Mr. SCHUMER. Mr. President, I rise to offer this amendment which will help balance the oil markets and help families balance their budgets this winter by pulling some of the money out of the gas pumps and putting it back in people's pockets. It would do so by instituting a windfall profit levy on the oil companies and transferring those proceeds back to where they came from, the consumer.

I am going to not use all the rhetoric. We have talked about a windfall levy before. But this one is considerably different than the one that was offered before in a number of ways. I would like to outline those ways.

First, the revenues go directly to the individual's pockets. It does not go through the Government. It does not go through any agency. It simply adds a tax credit of $100 for every person. That means the money goes to everyone. Big families will get more than small families, and it will certainly help taxpayers at the lower end.

The temporary levy we are talking about is also different. The previous one just taxed oil when it was above $40 a barrel. My worry about that is that it could raise the price at the pump. What we are doing is using a method that puts this levy on profits. It means that that happens after the companies have brought in their cash and, therefore, is quite different than an amendment that just goes on to taxes.

Let me describe the amendment. We create a temporary levy on the excess profits of U.S. oil companies and foreign companies that do substantial business in the United States, in order to provide every taxpayer with a nonrefundable tax credit of $100 for 2005 for every person in their household. The temporary levy applies to major integrated oil companies, plus any refiners or producers with more than $100 million in sales. The revenue mechanism is an actual tax on windfall profits in 2005 that exceed a 3-year historic average. It will be very easy for the companies to calculate this based on the numbers they have previously reported on their tax returns. So no one can argue it is administratively difficult.

The proposal is intended to be a complement to the other windfall proposals. It is different. For those who argue against the other proposals on grounds that such levees will increase production costs and thereby fuel costs, this amendment addresses those concerns because it is an actual tax on profits, not production. In other words, those who say they object to windfall profit levees on these grounds will have to show their real colors. Those who don't want to force the oil companies to give up anything under any circumstances will, of course, not vote for this amendment. But for those who have come to the floor to argue against other proposals simply because they say they will increase production costs, this amendment would not. You should vote for it.

As I mentioned, the revenue goes to provide every U.S. taxpayer with a nonrefundable tax credit of $100. The amendment is designed to be revenue neutral. The excess profit tax rate will be adjusted, as necessary, to ensure there will be no net budget impact that violates the reconciliation instructions.

Bottom line: different than the other proposal; money goes directly to the taxpayer; money is levied on profits so it doesn't raise costs or interfere with production because it is after the line.

I ask for the yeas and nays on the amendment.

http://thomas.loc.gov/