Wisconsin Oil Tax: Still a Bum Idea

By August 15, 2007Energy, Taxation

Legislators are still battling over the state’s budget in Wisconsin, including Governor Hugo Doyle’s scheme to impose a 2.5 percent gross receipts tax per of oil meant for sale in Wisconsin. (It works out to about 7 cents per gallon.) What makes this proposal legally suspect and politically offensive is Doyle’s claim he can stop the companies from passing the extra costs on to the customer — making it a crime! — which the governor is selling with a particular ugly brand of anti-market populism.

As the Wisconsin Manufacturers & Commerce has pointed out, the tax would violate the Commerce Clause, and attempts to impose these levies elsewhere have failed in the courts. Pennsylvania Governor Rendell, who proposed a similar tax earlier in the year, gave up the fight last month.

Interestingly enough, the Appleton Post-Crescent reports (in this story) that the bridge collapse in Minnesota has not had a major impact on the budget debates. No rush to tax increases.

Our friends at the Wisconsin Petroleum Council have been keeping up the pressure against the unconstitutional gas tax increase, noting that contrary to Doyle’s claims, it would hit many more companies than just the governor’s maligned “Big Oil.” And the WPC is making their case via a variety of media.

Along with radio spots, there are Youtube video advocacy pieces, “The Unintended Consequences of the Oil Franchise Tax,” in which WPC’s executive director, Erin Roth, states several arguments. Part I, and Part II. Among the many worthy points: The state would collect the tax during a court challenge and then, once it’s struck down by the courts, owe the oil companies millions. How does that help infrastructure?

Leave a Reply