Sen. Robert Casey, D-Pa., said he would introduce legislation Thursday to put in place a 50 percent tax on major oil companies profits' from crude oil priced at more than $50 per barrel, where it has been trading for most of the past two years. The bill, similar to others proposed by members of Congress in recent years, also would eliminate oil industry tax breaks and raise the royalties companies pay to the government for offshore drilling leases.
Casey, speaking with seven other new senators at a Capitol Hill news conference, said family budgets have been squeezed by the rising costs of health care and college tuition and fuel.
The House passed legislation scaling back oil industry subsidies in January, part of House Speaker Nancy Pelosi's pledge to push through six high priority issues after Democrats took control of Congress. Previous efforts to pass windfall profits taxes have failed in Congress, and President Bush has opposed the idea.
Under Casey's bill, money from the windfall profits tax would be used for a new program to help the poor pay for transportation costs. Money from ending tax breaks would fund research into alternative fuels.
The American Petroleum Institute, which represents the oil industry, said in an e-mail that the oil and gas industry's earnings are similar _ as a portion of overall revenue _ to those of other industries.
"New taxes would prove counterproductive in light of the tremendous capital investment the oil and natural gas sector needs to meet future U.S. energy demand," the trade group said.
Casey's call for new taxes came as Exxon Mobil, the world's largest publicly traded oil company, said its net income grew 10 percent in the first quarter, as higher refining, marketing and chemical profit margins overcame lower crude-oil and natural-gas prices. Exxon Mobil was the third major oil company to report earnings in as many days. BP PLC, Europe's second-largest oil company, on Tuesday reported a 17 percent drop in first-quarter earnings on lower oil prices and declining production. On Wednesday, ConocoPhillips said its first-quarter profit rose 7.7 percent, but the result was propped up by assets sales as it also was hurt by lower commodity prices.
The benchmark light, sweet crude for June delivery rose 18 cents to $66.02 a barrel in midday trading on the New York Mercantile Exchange.