Need for Oil Import Tax

The article by Edward Kutler and Glenn Sweetman (Editorial Pages, Feb. 7), "Oil Taxes Are a Step Backwards," presented weak arguments against an oil import tax. No tax is imposed without some complicating side effects. The best reason for this tax is that almost every other industrialized country in the world has used this form of taxation successfully for the past 40 years.

If most of the world pays $2 to $3 for a gallon of gasoline, why should not Americans be progressively eased toward making the same sacrifice? Not only the state of our Treasury would be improved but also our roads, bridges and highways. Prices of all petroleum products in the United States should be made comparable to those paid by our foreign competitors.

Higher prices inherently stimulate conservation. Consumer conservation and oil exploration incentives are what brought us out of the 1973-74 and 1979 crises. Both means must be encouraged in order to avoid future crises.

U.S. tax laws should continue to encourage domestic exploration but not in the previously undisciplined manner whereby excess amounts of risk (tax-shelter) capital were allowed to be squandered on too many dry holes instead of finding its way into productive ventures--or the U.S. Treasury.

How soon the world's oil will be exhausted, nobody knows, but prudence dictates that we not sit back and blithely deplete existing reserves. Our strategic petroleum reserves should be augmented by new domestic oil discoveries. The sooner we find out the full extent of our own natural reserves, the more orderly will be our future conversion to alternate energy supplies.

Successful exploration does not have to culminate immediately in the production of oil--not if the expected costs make the new oil non-competitive with current crude oil. This would be kept in reserve for delayed strategic use. Certainly, sometime in the future all such oil will be competitive and will be brought to the surface for consumption.

Bring on a well planned tax. Not only should the tax absorb the recent crude oil price reductions, but it should also make provisions for additional revenue derived from price increases to all petroleum product consumers. This will result in the substantial "revenue enhancement" we really need to relieve the budget burden.

Few Americans are aware of the disproportionately low petroleum prices they enjoy. All that it takes is courageous political leadership to appeal to Americans' renowned sense of fairness.

ROBERT L. JORDAN

Los Angeles

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