New oil tax fails

By CMTA Staff

Capitol Update, March 21, 2008 Share this on FacebookTweet thisEmail this to a friend

In an effort to address a portion of California’s now $8 billion deficit, Assembly Speaker Fabian Nunez (D-Los Angeles) proposed ABx3 9.  The bill would have placed a six percent tax on all oil manufactured in the state and was estimated to bring in about $1.2 billion a year.  The bill would also have required wealthier oil companies, with revenues over $10 million, to pay a two percent surcharge tax on their excess profits.  The revenue would have been used to help offset the proposed cuts in education likely to result in hundreds of teacher layoffs statewide.
The bill was defeated in the Assembly on a 45-30 vote, needing a 2/3 majority to pass.  Republicans contested the bill saying that it was only going to hurt consumers more at the pump. In addition, they claimed that the Speaker was trying to divert attention away from accountable spending by raising taxes instead.  Although proponents indicated the measure would not permit companies to pass on the tax to the average consumer at the pump, opponents noted that, in the end, consumers would absolutely pay a higher price for fuel, as well as for goods and services.
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