Thursday, July 22, 2010

Rendell: No Reason Not To Vote for Oil Profits Tax

Governor Ed Rendell says a new tax on oil companies would generate nearly a billion dollars for Pennsylvania’s transportation needs.
Rendell told the Senate Transportation Committee due to oil companies' use of the Delaware Loophole, major oil companies only pay about 65 million dollars worth of income tax in Pennsylvania.
He’s pushing for a bill exempting energy giants like Exxon Mobil and BP from the corporate net income tax, but creating a new levy on their profits.
The governor says his measure would make sure the companies don’t increase gas prices to pay for the tax, by creating an index of states with rates similar to Pennsylvania.

"If those other three states go up two cents an average and we go up sixteen cents an average, then those companies are subject to investigation by the Attorney General, and have to come up with a reason. Otherwise they’ll be subject to severe civil and criminal penalties."

Rendell concedes the language would likely be challenged in court, but says he’s confident a judge would rule in Pennsylvania’s favor.
The oil company tax is the governor’s preference for filling the transportation funding gap created because state leaders counted on revenues from a proposed tolling of Interstate 80 but the federal government rejected that plan.
He says it could generate up to 900 million dollars a year.

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