The price of gasoline will likely be an important issue in the elections of 2012. No one looks forward to paying five dollars or more for a gallon of gas, but dividing lines are already being drawn over tax issues related to oil. Democrats in the United States Senate recently announced a proposal to eliminate some tax deductions that oil companies can take. The plan is written in such a way as to restrict the elimination of tax breaks to the five largest oil companies. The plan contains a definition so that companies below a certain level of revenue would not be affected by the plan. The Democratic Senators put forth the plan as a way to reduce the federal deficit. Projections indicate that the elimination of the tax breaks would increase federal revenue by 21 billion dollars.
The language used to discuss the plan by Democratic senators reveals differences in thinking. Those who support the plan talk about having the big oil companies pay their fair share of taxes. Those who oppose the plan call the plan an increase in energy taxes. A recent television ad campaign portrays ordinary-looking people saying that the Senate plan to increase energy taxes will further increase the price of gasoline. Some of the ads claim that increased energy taxes will also further our dependence on foreign oil. Perhaps to address this issue, the Obama administration has proposed using some of the increased tax revenue to fund clean energy projects that would provide energy without the use of crude oil.
The politics associated with the price of oil and gasoline will likely be a topic of discussion in campaigns of those seeking election or re-election to the United States Senate and House of Representatives. Republican candidates will likely claim that Democrats refuse to consider any other method than increasing taxes to reduce the federal debt. They will not consider reducing spending. Democratic candidates will likely portray their Republican opponents as being in the pocket of big oil companies. They may exploit the perception among many Americans that high gas prices are caused by the greed of big oil companies. They may point to the amounts that oil companies paid in taxes, or even talk about how Americans are paying record prices for gasoline while big oil companies get tax refunds.
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