Taxation of Petroleum Imports : Scheduled for Hearings Before the Subcommittee On Energy And Agricultural Taxation of the Senate Committee On Finance On February 27-28, 1986 Jcs-5-86
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' ' See, Section I.G., above, for present law tariff provisions. ' ^ This would appear to require the imposition of different social security tax rates in various states. IV. ISSUES A. Energy Policy ^n general A tax on the sale or use of imported petroleum (such as provided )y S. 1997) is economically equivalent to an increase in petroleum ariff rates (such as provided by S. 1507). Both would raise the do- nestic price of petroleum above the world market price by the imount of the tax or tariff.... ^ ^ This would influence both the domes- ic demand and supply for petroleum. Domestic consumers confronted with higher petroleum prices »ver time will reduce petroleum consumption. Demand reduction tccurs as consumers shift to alternative fuels, improve energy effi- iency, and curtail consumption of goods and services produced rom petroleum. Domestic producers would receive an increased price for existing )roduction. In addition, some domestic petroleum and synthetic uels which are unprofitable to develop at world market prices may )e produced at a profit as a result of tariff protection.
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