By Andrew Restuccia - 05/03/11 07:23 PM EDT
Workers would be able to divert a portion of their paychecks into an untaxed account that can be used to pay for gas and other fuels under new legislation set to be introduced in the Senate this week.
The legislation, authored by Sen. Mark Begich (D-Alaska), is aimed at lessening the burden of high gas prices on consumers. The bill comes as lawmakers on both sides of the aisle are scrambling to do something about gas prices, which are nearing $4 a gallon.
“You get to put aside pre-tax dollars and the result is you get to buy your fuel with pre-tax dollars,” Begich said.
“On average, let’s assume people have a tax rate of 20 percent, which is probably average for an individual. At $4 a gallon, you’re going to save 80 cents right off the bat.”
Begich said he is working to gain co-sponsors for the bill, which he will introduce Wednesday or Thursday.
The legislation would sunset after two years in order to give lawmakers time to pass energy legislation that begins to diversify the country’s energy portfolio, Begich said.
The bills comes as Republicans are set to consider legislation this week that would expand domestic oil-and-gas drilling. Democrats, meanwhile, are hoping to secure a vote in both chambers on a proposal to eliminate billions of dollars in tax breaks for the oil industry.
Begich, a drill-state Democrat, blasted proposals to cut the tax breaks.
“If people think by rolling back subsidies, you’re going to lower the price of gas, it’s a total disconnect from reality,” he said. “These ideas that they’re kicking around are nice discussion points, but they’re not going to do anything. We’ve got to get some immediate solutions on the table.”
Begich is one of seven Democrats who voted against a provision to cut oil-industry subsidies in February.