The House Ways and Means Committee yesterday tentatively approved, 19 to 17, a limited rebate to taxpayers of the wellhead tax it voted last week on oil. The rebate would mean reduced withholding of about $1 a family a week, beginning next year.
The committee voted to limit the rebate to next year only, but made clear it will then extend it in some form to hand back to consumers the larger wellhead revenues that would be collected in future years. It also changed the formula proposed by the Carter administration that would have rebated $84 to a family of four, so that a family could receive only $56 and a single person $28 next year. The money would be rebated by reducing the tax withheld from weekly pay checks.
The central part of President Carter's oil conservation program is a three-stage tax on the wellhead price of oil to raise the price of domestic crude oil over three years to last spring's world price of $13.50 per 42 gallon barrel.
The President hopes the higher price will cut consumption. But since his proposals seek to conserve energy rather than raise revenue, Carter proposed rebating the entire oil tax on a per capita basis to every person in the United States.
Yesterday the committee rejected 21 to 16 a Republican proposal to give part of the rebate in the form of a permanent tax cut of $4.6 billion a year - the estimated revenue from the first stage of the wellhead tax next year. It also rejected 16 to 13, the administration's per capita rebate formula, and by voice vote, it refused to use the tax revenue to pay off part of the national debt.
Then it approved a one-year rebate that would begin the first of next year when the oil tax takes effect. The tax would continue through September, 1981, when price controls on oil expire, and probably would be extended if controls are extended.
The one-year rebate was approved 22 to 0 on grounds that the committee should take another look at what to do with the money next year when it considers tax reform legislation. Several members said once the rebates to taxpayers begin it would be politically impossible to stop them so long as the tax is in force.
The expected revenue from the tax would go up from $4.6 billion next year to $9.1 billion in 1979 and to $13.8 billion in 1980 when the tax will be fully in effect. All this would be rebated under the administration plan.
Rep. Joseph L. Fisher (D-Va.) tried to earmark 20 per cent of the oil tax revenues for energy research, mass transit construction and aid to states for transportation needs. The committee rejected the proposal on grounds that the oil tax is a regressive sales tax that should be rebated to the people. But several members indicated they would vote for Fisher's proposal in some other part of the bill such as the tax on big gas-guzzling cars. That also was tentatively rejected last week, but all the committee's votes the last 21/2 weeks are subject to reconsideration in a second round of voting beginning Thursday.
The administration had also proposed a special rebate of part of the oil tax to users of home heating oil. The Ways and Means Committee rejected that last week as giving special preference to one group of oil users in the Northeast. Yesterday Rep. William R. Cotter (D-Conn.), who usually votes with the pro'administration Democrats, voted against the rebate as finally approved in protest to the vote against the home heating oil rebate. He said there may be more Northeast votes against it on the second go-round.