Obama Keeps Promise on Big Oil Tax

Yesterday, the environmental world was abuzz with rumors that President-Elect Obama was backing away from his pledge to tax windfall profits earned by the big oil companies.

Obama argued during the campaign that the oil industry had benefitted for decades from tax breaks and subsidies designed to help it expand energy infrastructure, but now that oil companies are earning record-breaking profits, it's time to reverse the tax breaks so funds could be invested in renewable energy development.

Yesterday, some news organizations were reporting that an aide to Obama claimed he was no longer interested in a windfall profits tax because the price of oil had dropped significantly since the campaign and profits would probably be too low to tax.

Today, however, the Obama administration officially reaffirmed its support for rolling back tax subsidies for oil companies. They did point out that during the campaign, Obama was very specific in noting that the windfall profits tax would only be triggered when oil prices were at $80/barrel or more. As long as the prices are below that, no such tax comes into effect.

So, it seems, the policy of the Obama administration will be to roll back unneccesary subsidies to the oil industry and to put in place a windfall profits tax that applies when oil reaches $80/barrel or more.

Read the full story from Talking Points Memo HERE.