Reagan to Back Repeal of Oil Windfall Tax
President Reagan responded to pleas for help from states battered by the plunge in oil prices today by notifying Congress that he will support early repeal of the windfall profits tax on oil companies.
Rep. Mickey Edwards (R-Okla.) said he had received a similar message from the White House shortly before he and four other oil-state lawmakers met with Reagan to discuss the status of the domestic oil industry.
The move to repeal the tax, enacted in 1980 as a means of recapturing revenues generated by the decontrol of oil prices, is consistent with the opposition Reagan has voiced to the levy since the 1980 campaign.
At its peak in 1981, the tax--set to expire at the end of 1990--netted $23 billion for the U.S. Treasury. That figure has been declining steadily ever since and is expected to be down to $4.2 billion this year with the recent plunge in oil prices.
White House spokesman Larry Speakes said that, although the tax has little effect on oil prices--and profits--as low as they are at present, repeal would be “one less barrier” to increased exploration in the future.