Just a few days ago I wrote about hybrid vehicles as a way to deal with outrageous gasoline prices and claim a nice tax break. Since then, a couple of things have happened.
The IRS announced two more autos, Lexus and Toyota 2007 models, are now on the clean-fuel tax credit list. I added them to the original post.
And Congress continues to toy with taxes as an answer to the pump price problem.
To go along with the current hybrid vehicle tax break, Congress is said to be considering another credit for gas-electric cars. Also being discussed is a two-month gas tax holiday via suspension of the 18.4 cent federal gasoline tax and the 24 cent a gallon diesel tax.
On the corporate tax side, Capitol Hill reportedly is reassessing some oil company tax breaks that looked fine to them last year.
Also under consideration, accounting rule changes for oil inventory that could force the five biggest oil companies to pay an additional $4.3 million in taxes, the windfall profits tax issue raised earlier.
One economic expert, however, told Congress today that he didn't think a tax on the oil companies' excess income would do any good. According to The Washington Wire, the Wall Street Journal's blog, Federal Reserve Chairman Ben Bernanke said, "Profits taxes have the adverse effect of removing one of the major incentives of our market system; if people think that their profits are going to be taxed away, that reduces their incentive to engage in certain activities."
As much as I'd personally like to stick it to Big Oil, I have to agree with Bernanke. Business is business, which means you do what you can to make money. And all of us, individual or incorporated, look for ways -- legal, of course -- to pay as little taxes on our income as possible.
Heck, as a tax writer, I'm always telling people to reduce taxable income by putting money in a tax-favored or tax-deferred retirement account, postponing receipt of income when possible to push it into another tax year, bunching expenses to get a bigger deduction, etc.
If making more money suddenly costs oil companies more in taxes, it's a damn safe bet that all their high-priced tax and financial consultants will find a way or two to change operations to prevent that. And I suspect the changes won't do you, me and Average Mike Motorist any good.
For a more immediate way to make us less road weary, Congress is also looking at the possibility of issuing millions of taxpayers a $100 rebate. That strategy seemed to work well for Capitol Hill the last couple of times they tried it, back in 2003 in connection with the increased child tax credit and in 2001 to account for the new 10 percent tax bracket.
And here we are in 2006, an election year with a president receiving historically low public support and most of his party's lawmakers facing a generally disgruntled electorate. You don't think the public's frustration with W in particular and Washington in general has anything at all to do with incumbents making the most of their positions in order to curry voter favor, do you?
Is $100 enough to get you to reconsider your vote in November?
An even smarmier move is the way supporters of the rebate check measure hope to get it passed: Tying it to a bill to open up the Arctic National Wildlife Refuge for drilling.
This is such a weaselly way to get controversial -- and previously defeated -- legislation passed. I watched it happen for years while working in D.C. Take one issue that has broad support and tack on an amendment for something else that's totally unrelated and otherwise wouldn't pass.
Lawmakers then must decide: Pass the positive measure in spite of the bad add-on, or kill what would be better for the greater good in order to keep the bastard amendment language from becoming law?
Whether the $100 rebate is a good idea or not is immaterial. The process to make it happen stinks to high heaven. Sadly, though, it's a legislative maneuver that's not going to go away.
This Washington Post story has more on the gas price related legislative proposals and the machinations of their supporters.