It would be hard to find many people who don’t think BP should be financially responsible for the cleanup of the huge oil spill in the Gulf of Mexico. Even BP admits its responsibility.
But Congress is indulging in a little grandstanding to reassure us that it is “doing something.” The trouble is, that grandstanding may wind up costing not just BP but the rest of us a lot of money.
Lawmakers want a fivefold increase in the tax that not only BP but all the oil companies pay into a fund for the cleanup of spills.
We don’t doubt that BP or any other oil company ought to pay for any mess it creates, and it may make us feel better to think of “Big Oil fat cats” paying higher taxes. But who do you think ultimately pays those taxes?
You do — every time you fill up at the pump! A tax — even a necessary tax — is essentially one more cost of doing business. The oil companies, like any other company, are likely to roll part or all of the proposed big tax increase into their prices. That means consumers will eventually foot the bill by paying higher gasoline prices.
We’re not saying the existing spill liability tax on oil companies is improper. There may even be some justification for increasing it.
But we are fooling ourselves if we think that major tax increases on some companies or individuals do not have consequences for the rest of us as well.