The latest Democratic effort to raise taxes on oil and gas companies by eliminating credits and write-offs might make people feel better about hitting back at companies that charge big money for a gallon of gas, but it will do little to lower the cost, and could even lead to higher prices, energy policy experts say.
The recent spike in gas prices has reignited the battle over oil and foreign energy dependence, while both parties spring into action with bills they say will address the rising costs. Republicans are using the high prices to call for increased drilling permits for oil companies, while Democrats want to eliminate $4 billion in credits and write-offs in the tax code for oil companies while increasing government spending on alternative energy companies like wind and solar.
House Democrats will force a vote on ending certain loopholes Thursday.
But what can actions from Washington to cut tax loopholes for oil companies actually do to lower gas prices now?
“In the short term, the answer is nothing,” said Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution. “It wouldn’t be the end of the world, but it would have a negative impact on the economy overall.”