WASHINGTON — The House approved $18 billion in new taxes on the largest oil companies Wednesday as Democrats cited record oil prices and rising gasoline costs in a time of economic troubles.
The money collected over 10 years would provide tax breaks for wind, solar and other alternative energy sources and for energy conservation. The legislation, approved 236-182, would cost the five largest oil companies an average of $1.8 billion a year over that period, according an analysis by the House Ways and Means Committee. Those companies earned a combined $123 billion last year.
Senate Democratic leaders said they would put the bill on a fast track and try to avoid a Republican filibuster. The White House said the bill unfairly takes aim at the oil industry. President Bush is expected to veto the legislation if it passes Congress.
House Majority Leader Steny Hoyer, D-Md., noted it was two years ago, when oil cost $55 a barrel, when Bush said oil companies need no government subsidies to pursue more oil or gas.
“With the price of oil hovering around $100 do we really believe this incentive is justified?” asked Hoyer. “Do these companies need taxpayer subsidies to look for new product? They don’t need any incentive.”
Republicans said the measure unfairly targeted a single industry.
“It punishes the oil and gas industry. This is wrongheaded. It will result in higher prices at the gasoline pump. It’s spiteful and wrong,” said Rep. Jim McCrery, R-La.
The top Republican on the Ways and Means Committee, which developed the tax proposals, McCrery cited statistics that show that oil companies already pay more taxes than many other industries.
Hoyer acknowledged “this legislation alone will not bring down gas prices.” But he said the measure will provide a needed boost to alternative energy industries — solar, wind, biofuels and geothermal — and help promote energy conservation. “That may bring down gas prices three years from now, 10 years from now,” he said.
The bill would roll back two lucrative tax breaks for the five largest U.S. oil companies. One helps manufacturers compete against foreign companies; the other gives American companies a tax credit related to oil and gas extraction outside the country. Democrats estimated that those current breaks represent $17.65 billion in tax savings for oil companies over the next 10 years.
The House-passed bill would use that money to promote renewable energy industries — such as wind, solar and cellulosic ethanol plants — by extending tax credits that recently expired or are scheduled to end at year’s end.
The bill would offer tax credits for more energy-efficient homes and a credit for “plug-in” gas-electric hybrid cars that would capture electricity off the power grid, once such cars become available in showrooms.