So Why the Tax?

It is my understanding that in the event of ANY oil spill the bill for clean-up and all actions associated with the clean up are the financial responsibility of the Oil Company.  Right?

So why the need for this?  Other than to jack up consumer prices on oil and petroleum related products to the consumer so we all give up our cars for Wind Powered Solar Bicycles?

I’m even confused by the commentary in the article, the political windbags even contradict themselves (I know WOW! that’s a shocker!)

From the AP

Oil tax increase would help pay to clean up spills

WASHINGTON (AP) - Responding to the massive BP oil spill, Congress is getting ready to quadruple—to 32 cents a barrel—a tax on oil used to help finance cleanups. The increase would raise nearly $11 billion over the next decade.

The tax is levied on oil produced in the U.S. or imported from foreign countries. The revenue goes to a fund managed by the Coast Guard to help pay to clean up spills in waterways, such as the Gulf of Mexico…

…Lawmakers want to increase the current 8-cent-a-barrel tax on oil to make sure there is enough money available to respond to oil spills. At least 6 million gallons of crude have spewed into the Gulf of Mexico since a drilling rig exploded April 20 off the Louisiana coast.

President Barack Obama and congressional leaders have said they expect BP to foot the bill for the cleanup.

"Taxpayers will not pick up the tab," Senate Majority Leader Harry Reid, D-Nev., said Monday.

So… Why the tax?

Again, we’re back to the idiot logic of… “We’re not taxing individuals, we’re taxing evil nasty corporations..”  Ignoring that simple fact that increased taxes on companies ALWAYS results in trickle down to the retail price.  Gotta cover the tax somehow.

Knock it off you Ass-Clowns!!!  Stop taxing the public and corporations just to make yourselves look like you are doing something for your salaries!

Comments

[jmotorhead]

The operator already ran for the liability umbrella. The new plan is nothing like FDIC. FDIC is funded via premiums charged to the member institutions, same for NCUIA. As for the limit helping small operators, the King has no clothes. If you know your on the hook for the damage you might not cut back on safety costs. And the limits are for all not just the small time operator. What is the liability limits for a chemical spill?

[jmotorhead]

I agree. Make them responsible for the costs. The tax pushes the burden to the consumer and tax payer. I have to give BP credit as they have not ran to the liability protection like some of the other involved. There has been some call to change the limits, but some are saying that would be bad. The limits should never been put in ther in the first place, but EXXon has lots of friends.

[Brian R]

Smaller companies may not have enough assets to cover it. eg, in this case if they pinned it on the rig operator (Can't remember their name right now. Transocean?) rather than BP. You could take all they've got and not even come close to the cleanup costs.

I haven't read much about this, but the general idea sounds sort of like an oil industry FDIC. Although the Superfund might be a closer analogy.

[J Carmichael]

Ok, I'll concede that it is because of the liability mandated. Why not change the mandate? Might make companies a bit more attentive if they realize they are on the hook for their corporate life... no?

[jmotorhead]

I think it is in response to the OPA 90, Oil Pollution Act 1990. The act limits the liability at $75 million.

(33 U.S.C. 2702)
SEC. 1004. LIMITS ON LIABILITY.
(a) GENERAL RULE.—Except as otherwise provided in this section,
the total of the liability of a responsible party under section
1002 and any removal costs incurred by, or on behalf of, the responsible
party, with respect to each incident shall not exceed—
(1) for a tank vessel, the greater of—
(A) $1,200 per gross ton; or
(B)(i) in the case of a vessel greater than 3,000 gross
tons, $10,000,000; or
(ii) in the case of a vessel of 3,000 gross tons or less,
$2,000,000;
(2) for any other vessel, $600 per gross ton or $500,000,
whichever is greater;
(3) for an offshore facility except a deepwater port, the total
of all removal costs plus $75,000,000; and
(4) for any onshore facility and a deepwater port,
$350,000,000.
(b) DIVISION OF LIABILITY FOR MOBILE OFFSHORE DRILLING
UNITS.—