Oil Prices would not go down due to tax breaks, top democrat says

May 2, 2011, 09:01 by R.E. Christian

The senior Democrat on the House Budget Committee said Sunday he doubted taking away oil-industry tax breaks would have much effect on gasoline prices.

Rep. Chris Van Hollen, D-Md., told CNN's "State of the Union" pump prices are primarily influenced by the world price for crude, which is in turned being pushed and pulled by market speculation and events in the Middle East.

"There is absolutely no justification to ask American taxpayers to provide these big subsidies and windfall profits to these oil companies when they are already making record profits," said Van Hollen. "So what the president has said is, let's not invest that by giving to it oil companies, let's try and invest it in our nation's future energy supply."

The idea was dismissed by Sen. John Barrasso, R-Wyo., who said raising taxes on a product will always cut into the supply of that product. "Raising costs by adding taxes is something to me that makes it harder for us to become secure with our own energy," he said.

Barrasso also disagreed with Van Hollen's proposal to release crude from the U.S. Strategic Petroleum Reserve to loosen up supplies. He said the SPR was meant to be a safety net for emergencies only.

Source: UPI