Get Ready For A Major Tax Increase

Townhall.com reported yesterday that Congress is getting ready to pass a tax increase on oil.  The new tax would be 32 cents a barrel, which Congress estimates will raise about $11 billion over the next decade.  The current tax on a barrel of oil is 8 cents.  The stated purpose of the tax is to ‘clean-up’ the oil spill in the Gulf.  The obvious question is, “Since BP is responsible for cleaning up the oil spill, the cost to the government is not going to be anywhere near $11 billion, so why are we increasing taxes on oil?”

Well, the tax is part of a much larger picture.  There is a bill in the works that Congress hopes to pass before Memorial Day.  The bill includes a one-year extension of some popular tax breaks that expired at the end of last year, and expanded unemployment benefits which include health insurance subsidies.

The House could vote on this as early as today, the Senate is hoping to vote on it by the end of the week.  This tax will impact everyone.  It will be a hidden tax, so many Americans may not be aware of why the cost of some items suddenly increases.  It will increase heating bills in the winter, the cost of gasoline, and will have a ripple effect, raising prices throught the economy.  This will slow down the economy and could bring us to a double-dip recession.

Please watch to see who votes in favor of this tax increase.  Anyone who votes for this needs to be voted out of office in November.

UPDATE:  Representative Bill Cassidy, a Republican from Louisiana, has introduced House Resolution 1374 stating that all revenues from the now 8-cents-a-barrel oil tax should be used to clean up the spill and for no other purposes.  See Thomas.gov for further developments.  This could be interesting.

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