Clinton Proposes Yearly $20B Tax on Oil Companies

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The New York Sun

WASHINGTON – In a speech on energy policy in which she praised the energy proposals of President Carter, Senator Clinton called for a $20 billion-a-year tax on America’s oil companies and demanded that the petroleum sector redistribute its profits toward the development of “renewable energy.”


The remarks were delivered yesterday at a conference of the Cleantech Venture Network, an organization that promotes investment in alternative energy sources. In a speech laden with partisan criticisms, Mrs. Clinton excoriated the oil industry for keeping petroleum prices high and bemoaned America’s “dependence on foreign oil.”


Mrs. Clinton’s response was to “ensure that we re-invest the tremendous drain that higher energy prices are exacting on middle-class families and the economy in a better energy future,” adding that Americans cannot “just let the current marketplace go at its own pace.”


Instead, Mrs. Clinton asked that oil companies reaping “amazing profits” dedicate the money to “a Strategic Energy Fund that provides incentives for companies and consumers who want to be part of our energy solution.”


The Strategic Energy Fund, according to Mrs. Clinton’s proposal, would be financed by a $20 billion-a-year tax on oil companies. “I believe that we need to assess the oil companies an alternative energy development fee to be put into the new Strategic Energy Fund,” she said, adding that the “fee” should be designed “so it is taken solely out of unanticipated profits from the sky-high oil prices and ensure that it is not passed on to consumers.”


Mrs. Clinton did not specify how she would prevent oil companies, deprived of revenue by the “fee,” from passing on the cost to consumers. The senator pledged that the levy would be “temporary, lasting just long enough to kickstart the alternative energy market that we all know is out there.”


Americans must “reform our energy taxes so that large oil companies which reap huge benefits over the next two years will pay a portion of their profits to fund new tax incentives for consumers and companies who want to do what we believe is the right thing,” Mrs. Clinton said, expressing her personal affinity for wind farms and solar power, which she said is used at her husband’s presidential library in Little Rock.


In addition to saddling oil companies with the “fee” corresponding to excessive profits, Mrs. Clinton proposed that they subsidize “a rebate or tax help, generated by the fund, to help middle-class families with the high costs of heating.” The senator has long been an advocate of the Low Income Home Energy Assistance Program, which provides federal subsidies for the energy expenses of poor Americans.


Among Mrs. Clinton’s other energy proposals was making “price-gouging” a federal crime. New York’s junior senator also called on the Bush Administration to spend $500 million on the “weatherization program,” and an additional $90 million on a massive nationwide public information campaign to “promote energy efficiency.”


These proposals, according to an energy policy analyst at the Heritage Foundation, Ben Lieberman, amounted to a “prescription for making the problem worse” when it comes to escalating oil costs.


“Higher taxes and government micromanagement,” Mr. Lieberman said, “is not the answer to our energy problem.”


The renewable fuels championed by Mrs. Clinton, Mr. Lieberman said, needed government help for a reason – namely, that they are more expensive and are not a competitive alternative to fossil fuels. As a result, Mr. Lieberman said, forcing energy companies to invest their profits in developing more expensive fuels, and thus diverting resources from finding new sources of fossil fuels, would likely make energy even more expensive for the middle-class and low-income Americans Mrs. Clinton said she was trying to protect.


The idea that government can better allocate oil companies’ research and development money than the companies themselves “is ridiculous,” Mr. Lieberman said.


During a brief question session with Cleantech members after the speech, Mrs. Clinton praised the energy policies of President Carter, who oversaw the massive energy crisis of the 1970s, saying that if his energy legislation had not been repealed in the 1980s, America “would be further ahead.”


When asked by a Cleantech member whether she would support the Kyoto Protocol, Mrs. Clinton declined to provide a definitive response, but criticized the Bush Administration for refusing to sign on to the treaty, saying, “They don’t believe in international rules.”


In 1997, when Mrs. Clinton’s husband was president, the Democratic controlled Senate voted 95 to 0 against America’s being a signatory to Kyoto style treaties.


The New York Sun

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