Candidates oppose taxing windfall profits

By BRIAN SCHEID
Bucks County Courier Times

Dave Costanzo, 20, of Morrisville, spent a lot more time at his job than he wanted to this summer.

High gas prices were the reason, he said, as he filled up his car with nearly $40 of gas at a Wawa in Bristol Township Friday.

Costanzo, who was on his way to start his junior year at Kutztown University Friday afternoon, said not only did high gas prices put a crimp on his social life, they kept him from coming back home to Morrisville during the school year. He just couldn’t afford the trip.

The college student wants Congress to do something — anything, really — to lower the prices at the pump, but he’s a realist.

“Anything that would help would be great, but what can they do?” Costanzo asked. “Once the oil companies know that they can charge us $4 for a gallon and we’ll pay for it, they’re not ever going to go back to 99 cents a gallon.”

And Americans are paying for it, in record numbers.

Last week, oil giant Exxon Mobil announced second-quarter profits of $11.68 billion, the largest profit of any quarter for any corporation in American history. Other major oil companies, Shell and Chevron, announced record profits as well.

But should these oil companies be punished for making record profits as Americans pay more than ever at the pump?

Several Democrats, including presumptive presidential nominee Barack Obama, have proposed a new windfall-profits tax on oil companies.

None of the three candidates in this year’s 8th District congressional race said this week that they’d support such a tax.

Tom Manion, the Republican challenger, said efforts to tax oil companies for windfall profits in the 1970s failed. The issue isn’t about oil company profits, but about Congress’ inaction on the nation’s energy crisis, he said.

“Congress recessed [Friday] without even bringing options to the House floor for a vote,” Manion said. “Let’s concentrate on finding alternate sources of energy, conserving the energy we have and expanding our domestic oil exploration.”

Higher taxes on oil company profits would do nothing to lower the prices at the pump, Manion said.

“Taking a share of their profits, which would amount to pennies on the dollars for our taxpayers, would actually be the reverse of what we’re trying to do, which is to [give them incentive] long term, to find creative, innovative solutions to the energy crisis,” he said.

Bucks County Congressman Patrick Murphy, D-8, said instead of a tax on windfall profits, Congress should work to close tax “loopholes” he believes oil companies are taking advantage of, such as the royalty fees oil companies aren’t paying.

“It’s outrageous that ExxonMobil is making $1,500 per second, while Pennsylvania families are paying over $4 per gallon of gas,” Murphy said. “Big Oil should not be using our tax dollars to pad their profit margin and I proudly voted to close their loopholes and invest in renewable energy, which will lower gas prices and create more green jobs right here in Bucks County.”

Tom Lingenfelter, who is running an independent campaign for Congress, said a tax on windfall profits would only be passed on to the consumer in the form of higher gas prices. “Basic Economics 101,” he said.

He said he opposes closing tax loopholes for oil companies.

“Tax breaks encourage more development and increase free market investment,” Lingenfelter said. “Oil companies already pay billons in taxes every year, contrary to the propaganda of opponents of the American free market.”

Murphy represents the residents of Bucks County, some districts of Abington, Upper Dublin and Upper Moreland in Montgomery County and two wards in Philadelphia.

Editor’s note: The candidates in this year’s 8th District congressional race all have short- and long-term plans they believe Congress should act on to lower gas prices. Today, we look at the proposals to tax record oil company profits. Fourth in an occasional series.