Is Senator Max Baucus (D-MT) sockin’ the Bakken but leaving green energy untouched in his comprehensive tax reform plan?
Last week, I posted a couple news stories featuring details on Sen. Baucus’ new tax plan and the effort to hike taxes on oil and gas production.
Now, The Daily Caller is reporting that the Baucus tax plan is silent on green energy tax credits.
Several renewable energy tax credits are set to expire at the end of this year if Congress does not renew them, including tax credits for wind, biofuels and green buildings and appliances.
Republicans have taken particular aim at the Wind Production Tax Credit that pays wind power producers for the first ten years of operation. Kansas Republican Rep. Mike Pompeo is leading a bipartisan coalition of 52 lawmakers in opposing the renewal of wind energy tax credits.
The Wind Production Tax Credit was first enacted in 1992 and has been extended seven times since then. Another one-year extension is estimated to cost $6 billion, according to the Joint Committee on Taxation.
While the future of wind tax credits are left blowing in the wind, the Baucus tax proposal takes aim at tax benefits enjoyed by a wide-range of industries, including the oil and gas industry.
As the Bakken-area development continues to lift jobs and tax revenues in Montana, Senator Max Baucus (D-MT) is seeking to hike taxes on the oil and gas sector. Baucus is chair of the poweful US Senate Finance Committee.
Politico’s “Morning Energy” has this:
INDUSTRY GROUPS GO AFTER BAUCUS TAX PROPOSAL: Some oil and gas groups aren’t happy with Senate Finance Chairman Max Baucus’s proposal yesterday aimed at cutting back on accelerated depreciation tax breaks taken by all kinds of companies. Baucus’s proposal would stop companies from immediately deducting intangible drilling costs (think repair work and site preparation), dumps the percentage depletion deduction and repeals the “last in, first out” accounting method. Fuel Fix has a good rundown of how industry would be affected (keep in mind the plan isn’t likely to go far anytime soon): http://bit.ly/1iz2MFO
Those aren’t subsidies, industry says: The tax code is riddled with problems, but tax provisions relating to oil and gas are ‘an example of public policy that actually works,’ Independent Petroleum Association of America President and CEO Barry Russell said. He cited one industry-backed study that concluded repealing the IDC deduction would cost 233,000 jobs by 2019 and cut domestic production as much as 20 percent. “Congress should know that the tax policies that govern independent producers are not credits, subsidies or handouts. These provisions and deductions, which are available to nearly every American industry, enable continued investment in U.S. energy exploration and production.”
Barry Russell, president of the Independent Petroleum Association of America, said the current tax code encourages critical investment in new energy production, but Baucus’ plan could jeopardize that:
Congress should know that the tax policies that govern independent producers are not credits, subsidies or handouts. These provisions and deductions, which are available to nearly every American industry, enable continued investment in U.S. energy exploration and production. Independent energy producers — companies with an average of 12 employees, which drill nearly 95 percent of the nation’s oil and gas wells — are at the heart of America’s great energy revival. The current provisions in the tax code that promote continued American energy production are key to the success of these small operators.
The American Exploration and Production Council also weighed in, saying it “is not good policy” to boost taxes “on an industry that is providing abundant, affordable domestic energy supplies, helping to spur economic growth and moving our nation toward energy independence.”