CONGRESSIONAL RESEARCH SERVICE REPORT EXAMINES THE DEBATE ON THE WINDFALL PROFIT TAX.

Since 1980, a special Federal excise tax -- the crude oil windfall profit tax -- has been imposed on most domestically produced crude oil. Recent oil prices below statutory base prices have caused Federal revenues from the tax to decline to nearly zero. This report is a pro/con discussion concerning the proposed repeal of the windfall profit tax on crude oil.

                                   by

Since 1980, a special Federal excise tax -- the windfall profit tax -- has been imposed on most domestically produced crude oil. The recent low market oil prices, at levels below statutory base prices, have caused revenues from this tax to decline to nearly zero. Oil producers must continue to file tax returns, however, and the Internal Revenue Service must administer the system despite the fact that the tax does not presently generate much revenue.

The compliance burden of the windfall profit tax now falls on a depressed U.S. oil industry. The administrative burden of the tax falls on the Federal Government which faces very large budget deficits. These concerns have induced some Federal policymakers to propose repeal of the tax. On the other hand, the Federal Government faces very large budget deficits. Should oil prices rise above $20 per barrel, the additional Federal tax revenues would contribute toward reducing these deficits. In addition, there are several other arguments for and against the windfall profit tax. The issue is, should the oil windfall profit tax be repealed?

BACKGROUND

The Crude Oil Windfall Profit Tax Act of 1980 (P.L. 96-223) introduced a system of excise taxes on domestically produced oil effective March 1, 1980. The tax is imposed on the difference between the selling (market) price of oil and some base price adjusted for inflation and State severance taxes. All domestically produced oil which is not specifically tax-exempt is classified into one of three tiers, each with a separate tax rate and adjusted base price.

The windfall profit tax (WPT) was enacted in response to the decontrol of crude oil prices. Between 1971 and 1980 the price of oil was controlled under President Nixon's wage-price freeze of August 15, 1971. In April 1979, the Carter Administration announced its intention to slowly phase out price controls between June 1, 1979, and September 30, 1981. Price decontrol meant that crude oil prices would rise to world market levels, which at that time were averaging about $30 per barrel. The sharp rise in domestic oil prices generated significant increases in oil industry revenues and profits. Federal policymakers concluded that it was unfair for the oil industry to experience such sharp increases in income; society at large, through the Federal Government's policies, should also share in some of the income gains. According to committee reports on the 1980 windfall tax legislation, the oil price increases resulting from price decontrol would greatly increase industry incomes and only negligibly increase oil production. Federal policymakers believed that the resulting increase in industry income would be far in excess of amounts needed for reinvestment in energy production. This would encourage investment in enterprises unrelated to the oil business. Undoubtedly, behind the motives to impose the windfall profits tax was the contention that: (1) domestic crude prices would rise to market levels which did not reflect competitive forces but the market power of OPEC (the Organization of Petroleum Exporting Countries); and (2) society should share in the economic return to natural resources.

The WPT is a temporary tax. The statute provides that the tax would begin to phase out sometime during the three-year period between January 1988 and January 1991. The precise starting point for the phaseout depends upon how much net revenues are collected. Net revenues (which must be estimated) are the difference between the gross collections from the WPT and the loss in income tax liabilities of the oil producers from deducting the WPT as a cost item against the income tax. If the Secretary of the Treasury reports that, on a given month, "aggregate net revenues" would exceed the pre- established target of $227.3 billion, then the phaseout of the tax would begin on the following month. If net revenues are not expected to exceed $227.3 billion before January 1991, then the phaseout of the tax would begin January 1991. Once the phaseout begins, the tax is phased out during a 33-month period by reducing each producer's tax by 3 percent each month.

Cumulative net revenues under the WPT are expected to fall well short of the established target of $227.3 billion. As shown in table 1, aggregate gross revenues (after adjustments for overpayment or underwithholding) totaled about $78 billion for the period through FY 1986. Net revenues for this period are estimated to be about $43 billion. From FY 1988 to 1993, the WPT is expected to generate zero revenues. This would make cumulative net revenues for the entire lifetime of the tax about $43 billion -- nearly $190 billion short of the target. At the present time, it seems highly unlikely, or nearly impossible, that the tax would generate the additional $190 billion in net revenue required to trigger the phaseout. This would require market oil prices to rise to levels which are above reasonable expectations, even over the next five years. Thus, it is expected that the beginning of the phaseout would be January 1991 and that the tax would terminate in September of 1993.

There are three reasons for the small amount of revenues collected under the WPT. The primary reason is low market crude oil prices. In addition, since 1980, base prices have been gradually adjusted upward due primarily to inflation. The result has been two forces acting to reduce the tax base -- the so-called "windfall profit." The third reason is a decline in oil production.

Recently, some policymakers have proposed the repeal of the WPT statute altogether. Repeal proposals originated with the Treasury Departments's tax reform proposal of 1984 as part of a compromise which would have repealed the oil industry's two major tax subsidies: the percentage depletion allowance and expensing of intangible drilling costs. In the spring of 1986, there was speculation that a repeal proposal would be part of the tax reform bills of 1986. The Tax Reform Act of 1986 (P.L. 99-514) did not, however, include a provision to repeal the WPT. Another attempt at repeal was made through an amendment to the 1986 debt limit bill (H.J. Res. 668) which would have increased the debt ceiling to over $2.3 trillion through FY 1987. This was approved by the House and Senate, but it was deleted by the conference committee, and so was never included as part of the debt extension legislation. Currently, as of May 1987, there are ten bills proposing to repeal the WPT. (These bills are listed in the last section of this report.) The Reagan Administration has consistently favored repealing the WPT. Their latest repeal proposal is in the FY 1988 budget. ¹

                 TABLE 1. Windfall Profit Tax Revenues

Source: U.S. Dept. of the Treasury. Internal Revenue Service. Statistics of Income Bulletin, v. 6, no. 2, Fall 1986. p. 88; Department of the Treasury. Office of Tax Analysis; and Executive Office of the President. Office of Management and Budget. FY 1988 Budget Supplement, p. 6c-25.

ARGUMENTS FOR REPEAL

There are four basic arguments for repealing the WPT on crude oil: (1) it is an inefficient tax which distorts the allocation of resources; (2) it reduces domestic oil production and therefore increases oil imports; (3) it is a compliance burden to the oil- producing industry and an administrative burden for the Internal Revenue Service even though the tax generates little or no tax revenues; and (4) it is unfair to single out the oil-producing industry to pay a special tax, especially at a time of severe industry recession.

The first three arguments may be categorized as fundamental criticisms of the windfall profit tax. The last argument is more a temporal argument due to the depressed economic condition of the domestic oil producing industry.

Economic Efficiency

The WPT distorts the price system's ability to allocate resources among competing economic sectors. In general, in the short run, the tax reduces domestic crude oil production because it increases the marginal cost of producing oil. In the long run, the tax reduces the rate of return to oil production, and resources are reallocated away from oil producers and toward other sectors of the economy.

The WPT also distorts the way resources are allocated within the oil industry. In particular, since the tax is imposed on oil as it is being removed, extraction is penalized and other aspects of the business become relatively favored. Thus it creates financial incentives to shift resources from exploration and drilling to development and refining.

There are additional distortions within the oil-producing sector as a result of the structure of the tax. Under the structure of the windfall profit tax, different tax rates and base prices apply to taxable oil, depending upon its classification in one of three tiers. These rates, base prices, and tiers are shown in table 2. These differences seem to favor oil from newer wells as opposed to oil from older wells, and oil produced from small wells and by independents, as opposed to oil produced from larger wells and by integrated producers. Thus, the structure of the windfall profit tax creates artificial tax incentives based on where the oil is located and who owns the oil even though all oil is basically homogeneous.

TABLE 2. Structure of the Crude Oil Windfall Profit Tax, 1986

 _____________________________________________________________________

In addition to the above distinctions, the following categories of oil are tax exempt: (1) oil produced by State and local Government and by charitable educational institutions or medical institutions; (2) oil produced from wells in certain regions of Alaska; (3) oil owned and produced by certain American Indian tribes; and (4) front- end oil and royalty oil.

Domestic Oil Production and Foreign Oil Imports

The second fundamental criticism of the WPT is that it is a tax on oil produced domestically in the United States. This tax, therefore, reduces domestic oil production and increases oil imports both in the short run and long run. This is a result of the fact that oil imports to the United States are a residual, the difference between aggregate demand for oil and aggregate domestic oil supply. ²

Any condition or factor which either reduces domestic supply (such as higher industry taxes) or which increase the aggregate demand for oil (such as higher national income) will increase oil imports.

The magnitude of the import effect depends upon the windfall tax amount per barrel net of income taxes (because the WPT is a deductible cost against the income tax) and the price elasticity of domestic supply of oil. This magnitude is not a known quantity and it must be estimated. Using tax return data for 1983 and assuming a supply price elasticity of +0.2, it is estimated that the WPT reduced domestic oil supplies by about 35 million barrels in 1983. This means that oil imports were about 35 million barrels greater as a result of the WPT. This represented about 3 percent of 1983 oil imports. ³

The result that the WPT increased oil imports implies that the United States was made somewhat more vulnerable to sharp oil price increases or complete oil supply embargoes from foreign oil producers. Presently, however, the WPT liability of oil producers is zero due to relatively low oil prices. Consequently, the tax does not now impose much of a burden beyond the compliance burden, and therefore it does not have the effect of increasing imported oil and making the U.S. more vulnerable.

The Burden of Compliance and Administration

The oil industry has maintained that the WPT is an extremely complicated tax to comply with and to administer. The Internal Revenue Service, the General Accounting Office, and the seven-year experience with the tax tend to support this claim. This suggests that the cost of compliance and administration may be too great to justify a tax which presently generates so little revenue.

The process of complying with the WPT involves a complicated system of interactions between a variety of oil industry entities and a variety of separate tax laws and energy regulations. The windfall profit tax is imposed on oil-producers when taxable crude oil is removed from the oil producing property. A producer who is liable for the tax is any individual or business with an economic interest in an oil-producing property. There are four kinds of producers -- independent producers, integrated oil companies, royalty owners (landowners), and tax-exempt parties. According to a 1984 General Accounting Office (GAO) report there were about 1 million oil producers (persons, institutions, and businesses) in the United States in 1984. ⁴

Operators are the approximately 18,000 persons in the business of managing the oil property. The property operator supplies the relevant information to the agent who withholds the tax. The operator has to determine the proper tier, how much oil was sold, and who has the economic interest. Even determining the proper tier is no easy task. According to a 1982 GAO report, considerable uncertainty surrounded the concept of oil property, thus making it difficult to classify oil into tiers. ⁵ Also, there may be hundreds of people having a fractional economic interest in a single oil producing property.

The withholding agent must actually compute and withhold the windfall profits tax based on the information supplied by the operator. The withholding agent, also called the first purchaser, is usually an integrated oil company but it could also be an independent producer. To compute the windfall profits tax amount, the agent subtracts from the removal price the base price and the corresponding State severance tax (if any). This computation requires the following steps: (1) knowing the category of oil; (2) determining the removal (selling) price; (3) adjusting the corresponding base price; (4) subtracting the State severance tax; and (5) testing for the 90 percent net income limitation. ⁶ Even some of the basic steps in this computation can be complex. For example, in 1983 there was some controversy over how to determine the "removal price" in the case of certain Sadlerochit oil in an Alaskan North Slope reservoir. Three different methods were used by the oil companies. The IRS had to issue several rulings before the matter was settled.

Having computed the tax liability, the first purchaser deducts this from the purchase price to be paid to the operator, and deposits the money in a Federal Reserve Bank. Integrated producers are required to deposit twice per month; independent producers are required to deposit every 45 days. The tax payment process does not, however, end here. There may be overpayment or shortages due primarily to the net income limitation and underwithholding which will require either refunds or additional payments.

Throughout this compliance process many tax return forms are required. The process is further complicated due to the numerous exceptions to the basic general rules. Also there are numerous and complex interactions between the windfall profit tax rules, the personal and corporate income tax rules, energy regulations, and State and local tax laws.

The windfall profit tax also appears to be a significant administrative burden for the IRS. The tax statute itself encompasses thirteen sections in twenty-five pages of the 1986 Internal Revenue Code. ⁷ In addition, the IRS has had to promulgate dozens of separate regulations, revenue rulings, letter rulings, and information releases just to enforce it. Furthermore, there have been statutory amendments to the WPT in virtually every tax bill which has been enacted since 1980.

The IRS has acknowledged the administrative burden of the tax in 1981 hearings before the House Subcommittee on Government Operations. A 1984 GAO report seemed to support this when it referred to the tax as "perhaps the largest and most complex tax ever levied on a U.S. industry." ⁸

Unfair Tax Burden on a Depressed Oil Industry

The final argument for repealing the windfall profit tax is that the oil-producing industry is, at the present time, severely depressed and, therefore, cannot withstand the burden of the tax.

There is little question about the present state of the United States oil-producing industry. Crude oil prices dropped from about $30 per barrel in the fall of 1985 to just over $10 per barrel in the summer of 1986. Presently, oil prices are about $19 per barrel. The collapse of oil prices has helped some segments of the industry such as refiners and marketers, but it has had a devastating effect on oil producers (i.e., drillers, operators, and landowners with an economic interest in oil) in general, and the small independent producer in particular.

According to industry data, earnings from exploration/production operations of selected companies in the first half of 1986 declined by about 60 percent from the first half of 1985. ⁹ This decline mirrors, roughly, the percentage decline in crude oil prices. Declining profits from oil production have sharply reduced drilling and exploration investment and employment. In the long run, oil production is expected to decline significantly. Two States in particular, Texas and Louisiana, have been particularly hard hit by low crude oil prices. In these States, oil and oil dependent businesses have gone bankrupt, large numbers of employees have been laid off, and revenues to State and local governments have declined. According to the Bureau of Labor Statistics, for example, the oil industry lost about 130,000 jobs from the second quarter of 1985 to the second quarter of 1986. ¹⁰

Repealing the WPT now would do little to help the depressed oil industry because oil prices are currently low and there is little if any tax liability to producers. However, if oil prices should rise again, they might exceed base prices and the WPT could be triggered. For example, oil prices are currently at about $19 which might trigger either a 70% or a 50% tax liability on tier one oil. Repealing the WPT would help the industry revive, in the event that market oil prices increase further. At the very least, repealing the WPT would reduce business costs and improve industry profitability somewhat by eliminating the compliance burden of the tax.

ARGUMENTS AGAINST REPEAL

Four basic arguments may be advanced in favor of retaining the existing windfall profits tax on crude oil and against its repeal: (1) the oil industry's income is an economic rent or monopoly profit to a highly concentrated industry which society, through taxation, should share in; (2) the oil industry benefits from other tax subsidies which have traditionally kept effective income tax rates very low; (3) if oil prices rise above base price levels, then the tax would generate additional revenues which are badly needed to reduce large Federal budget deficits; (4) the administrative apparatus is already in place and it makes little sense to eliminate the tax now, given that the tax is temporary.

Economic Rents and Monopoly Profits

Perhaps the most fundamental argument against repeal of the WPT is that society should share in the income earned through the production of oil. This is essentially the principal argument that motivated the enactment of the WPT in the first place. There are several aspects to this argument. First, oil is a natural resource whose long run supply is fixed; it is not like other factors of production such as labor and capital. The stock of natural resources is fixed in the long run whereas the stock (or supply) of the other factors is variable. Since the stock of oil is fixed, high levels of industry income are not necessary in order to ensure adequate supplies. If only low levels of income would ensure adequate oil supplies, then any industry income above that income earned from alternative use of industry resources could be deemed excessive (economic rents) and should be taxed away.

The second aspect to this argument is that oil industry income is excessive because: (1) the structure of the domestic oil industry is such that oil production is highly concentrated; and (2) the domestic price of oil is not a competitively determined price; it is determined in a oligopolistic world market dominated by OPEC.

The U.S. oil producing industry comprises over a mi11ion producers (in the sense of having an economic interest in oil), thousands of drillers and operators and marketers, and hundreds of refiners. However, the bulk of domestic production is highly concentrated. According to recent data, the largest 20 or 30 producers account for about 2/3 of total domestic production. ¹¹

It is also true that the price at which domestic producers sell their oil is established in a world market which has been dominated by the thirteen member countries of OPEC. The market power of OPEC has declined in recent years as member countries have increased their market share, as non-OPEC producers increase output, and with the discovery of relatively new sources of oil (e.g., the North Sea, Prudhoe Bay, and in countries as Brazil, China, and India). However, OPEC still accounts for about 40 percent of the supplies in the noncommunist world (down from their peak of 62 percent in 1977) and a significant share of total world output. Moreover, in an attempt to regain their market share, OPEC was a major force behind the decline in oil prices from 1985 to 1986, and the subsequent increase to $19 per barrel. It would appear that OPEC has sufficiently large oil reserves and market power to significantly influence oil prices, though not control as they did between 1973 and 1982.

The Industry's Low Effective Tax Rates

A powerful argument for retaining the WPT is that the tax helps to offset the otherwise very low effective income tax rates due to the availability of two oil industry tax subsidies (incentives): the percentage depletion allowance and the provision which permits companies to expense (deduct fully in the initial year) the intangible costs of drilling. The percentage depletion allowance permits oil producers to deduct an amount for the exhaustion of an oil reserve equal to a percentage of gross income. In theory, the deduction should be capitalized during the time the reserve is actually producing oil. This allowance was introduced in 1926. In 1975 the allowance was eliminated except for a limited amount of oil produced by independents.

The second major oil industry tax subsidy permits oil producers to expense rather than capitalize most of the costs associated with drilling. This subsidy was introduced in a 1918 administrative ruling by the Treasury Department. According to the Congressional Budget Office, repealing these two oil and gas tax subsidies would increase tax revenues by about $1.6 billion in FY 1988. ¹²

The combined effect of the two major oil tax provisions is to lower effective income tax rates for oil extraction below the comparable effective tax rates in other industries and below the top marginal statutory income tax rate of 46 percent for corporations. This is supported by the early as well as by the more recent empirical research studies on effective tax rates. ¹³

In the early studies, Harberger (1955) and Steiner (1959) demonstrate that oil and gas, as well as other minerals, received approximately twice the amount of tax incentives as other industries. In the category of effective tax rate studies, a 1971 report by U.S. Oil Week showed that major oil companies had an effective tax rate of 8.7 percent in 1970. Cox and Wright (1973) calculated rates ranging from 8.3 percent to 14.7 percent, depending upon accounting methods and income measures used. ¹⁴

More recent studies on effective tax rates which attempt to include the cutback in subsidies and the windfall profits tax give mixed results. Some studies, for example, show that oil and gas extraction is subject to very low effective tax rates. Several studies by the Congressional Research Service published between 1977 and 1983 show very low and, under certain circumstances, even negative marginal effective tax rates. For example, expensing of intangible drilling costs and dry hole costs and a 22 percent depletion rate resulted in an effective tax rate of -3.0 percent without the minimum tax and 12.0 percent with the minimum tax. ¹⁵ One recent CRS report, which includes the effects of the crude oil windfall profits tax, again shows generally low effective tax rates for oil and gas extraction. In cases where the effective tax rates are low, however, the crude oil windfall profits tax constitutes a significant part of the total effective tax burden. ¹⁶

Finally, in an inter-industry comparison, oil extraction and production had the lowest effective tax rates of eleven major industries -- 14 percent compared to 17 percent for construction (the next lowest) and 30 percent for the trade industry (the highest). ¹⁷

Budget Deficits and the Need for Revenues

There are important fiscal reasons for retaining the WPT. Since 1961, the Federal budget has been in deficit in every year but one (there was a small surplus in FY 1969). Since 1980, deficits have been extremely large -- over $1 trillion cumulatively for the period FY 1981-FY 1986. Deficits have been large relative to our overall economy -- in FY 1985 the deficit as a share of GNP was about 5 percent. The Congressional Budget Office forecasts baseline budget deficits of $833 billion for the period FY 1987-FY 1992. ¹⁸

During the 1980-1986 period, the WPT generated net revenues of just over $43 bi11ion. Thus, while total receipts generated by the WPT have been disappointing, they have kept deficits lower than what they would otherwise have been.

Presently, the WPT is generating very little revenue. However, it has still the potential for more revenues if market crude oil prices were to rise above statutory base prices. There is already some sign that crude oil prices are rising slightly from their depressed levels reached in the summer of 1986. The price of West Texas Intermediate has increased from lows of just under $10 per barrel in the Spring of 1986, to about $19 per barrel today. OPEC recently agreed on production cutbacks which could further raise oil prices. The major forecasting services, as well as the oil industry, are expecting a gradual increase in crude oil prices over the next few years. Of course, given the instabilities in the world crude oil market anything can happen. But the power of OPEC to influence, if not control the market, should not be underestimated.

While it is not expected that oil prices wi11 increase enough to generate substantial WPT revenues, if they surpass $20 per barrel, they would rise above base prices and generate some revenues. Given that the WPT system is already in place, it may be argued that any revenue, regardless of how small, will help reduce the enormous Federal budget deficits expected over the next few years.

Why Repeal a Temporary Tax?

The final argument in favor of retaining the WPT is, in effect, a counterargument to those who have criticized the tax as a compliance and administrative burden. The point is that, even admitting its complexity, the WPT system is already in place. Much of the costs of administering the tax are fixed cost. They have probably been, in large part, already incurred since most of the regulations have been promulgated. Given that the IRS has already incurred the fixed costs of running the WPT system, and given that the system will only be in effect for seven more years, it may make little sense to eliminate it.

² This is discussed in detail in two other CRS reports: U.S. Library of Congress. Congressional Research Service. Energy Taxes: A Comparative Analysis of the Gasoline Excise Tax and an Oil Import Tax and Their Effect on the States. CRS Report No. 86-637 E, by Salvatore Lazzari, July 25, 1986. Washington, 1986. p. 8-12; and U.S. Library of Congress. Congressional Research Service. Oil Import Taxes: Revenue and Economic Effects. CRS Report No. 86-572 E, by Bernard A. Gelb and Salvatore Lazzari. May 28, 1986 Washington, 1986. p. 28-32.

³ This estimate is quite sensitive to the assumed supply price elasticity, which is also unknown and has been derived from other studies. Generally, the more price elastic is the supply of oil, the larger would be the additional oil imports induced by the WPT.

⁴ U.S. General Accounting Office. IRS' Administration of the Crude Oil Windfall Profits Tax of 1980. Report to the chairman, Subcommittee on Commerce, Consumer, and Monetary Affairs, House Committee on Government Operations. GAO/GGD-84-15, June 18, 1984. Washington, 1984. p. i.

⁵ U.S. General Accounting Office. Uncertainties about the Definition and Scope of the Property Concept May Reduce Windfall Profit Tax Revenues. Report to the Secretary of the Treasury. May 13, 1982. GAO/GGD-82-48. Washington, p. 14.

⁶ The net income limitation limits the windfall profits tax liability to no more than 90 percent of the net income per barrel of oil. Net income is defined in terms of taxable income per barrel, with some adjustments.

⁷ Sections 4936-4998. Internal Revenue Code of 1986. Commerce Clearinghouse Inc. 1987.

⁸ U.S. General Accounting office. IRS's Administration of the Crude Oil Windfall Profit Tax. p.1.

⁹ Beck, Robert J. and Glenda E. Smith. Unparalleled Drop in Crude Prices Reduces Earnings for OGJ Group. The Oil and Gas Journal, v. 84, no. 35. September 1986. p. 17-22.

¹⁰ U.S. Department of Labor. Bureau of Labor Statistics. Monthly Labor Review, v. 109, no. 8, August 1986. p. 6.

¹¹ 1983 U.S.A. Oil Industry Directory. Penn Well Publishing Co. 1983; and American Petroleum Institute. Market Shares and Individual Company Data for U.S. Energy Markets: 1950-1984. October 1985. p. 30.

¹² U.S. Congressional Budget Office. Reducing the Deficit Spending and Revenue Options. A Report to the Senate and House Committees on the Budget - Part II. January, 1987. Washington. p. 220.

¹³ A few representative studies include Harberger, Arnold G. The Taxation of Mineral Industries. In U.S. Congress. Joint Committee on the Economic Report. Federal Tax Policy for Economic Growth and Stability. Joint Committee Print, 84th Congress, 1st session. Nov. 9, 1955. Washington, U.S. Govt. Print. Off., p. 439-449. Steiner, Peter O. Percentage Depletion and Resource Allocation. In U.S. Congress. House. Committee on Ways and Means. Tax Revision Compendium. Committee Print, 86th Congress, 1st session, v. 2, November 16, 1959. Washington, U.S. Govt. Print. Off., p. 949.

¹⁴ Much of this early empirical evidence is cited in U.S. Congress. Senate. Committee on Interior and Insular Affairs. An Analysis of the Federal Tax Treatment of Oil and Gas and Some Policy Alternatives. Committee Print, 93rd Congress, 2d session. Washington, U.S. Govt. Print. Off., 1974. p. 18.

¹⁵ U.S. Library of Congress. Congressional Research Service. Tax Provisions and Effective Tax Rates in the Oil and Gas Industry. Report no. 77-238 E [by] Jane Gravelle. Washington, 1977. p. 2.

¹⁶ U.S. Library of Congress. Congressional Research Service. Effective Federal Tax Rates on Income from Oil and Gas Extraction. Typed Report by Jane Gravelle, April 13, 1983. Washington, 1983. p. 5.

¹⁷ Gravelle, Jane G. Effective Federal Tax Rates on Income from Oil and Gas Extraction. Paper presented at the annual meeting of the Conference for Taxation, Resources and Economic Development. October 1983. Cambridge, Mass. p. 6.

¹⁸ U.S. Congressional Budget Office. The Economic and Budget Outlook: FY 1988-1992. A Report to the Senate and House Committees on the Budget, Part I. January, 1987. Washington, 1987. p. xiv.

LEGISLATION

H.R. 44 (Rep. Archer)

Amends the Internal Revenue Code to repeal the windfall profits tax on crude oil. Introduced on January 6, 1987. Referred to House Committee on Ways and Means.

H.R. 534 (Rep. Archer)

Amends the Internal Revenue Code to repeal the windfall profits tax. Also introduces tax credits for oil and gas exploration and revises the tax deductions for the oil depletion allowance and intangible drilling costs. Introduced on January 8, 1987. Referred to more than one committee.

H.R. 924 (Rep. English)

Amends the Internal Revenue Code to repeal the windfall profits tax on domestic crude oil. Introduced on February 3, 1987. Referred to House Committee on Ways and Means.

H.R. 1593 (Rep. Fields)

Repeals the windfall profits tax on domestic crude oil. Introduced on March 12, 1987. Referred to House Committee on Ways and Means and to several subcommittees.

H.R. 1960 (Rep. Moorehead)

Repeals the windfall profits tax; provides for the energy security of the United States. Introduced on April 7, 1987. Referred to more than one committee.

H.R. 2198 (Rep. Andrews)

Repeals the windfall profits tax and imposes a tax on imported petroleum. Introduced on April 29, 1987. Referred to the House Committee on Ways and Means.

S. 200 (Sen. Nickles)

Amends the Internal Revenue Code to repeal the windfall profits tax on domestic crude oil. Introduced on January 6, 1987. Referred to the Committee on Finance.

S. 255 (Sen. Boren)

Amends the Internal Revenue Code to repeal the windfall profits tax on crude oil. Introduced on January 6, 1987. Referred to the Committee on Finance.

S. 846 (Sen Nickles)

A bill to promote the energy security of the United States by amending the Internal Revenue Code of 1986 to encourage the continued exploration for and production of domestic oil and natural gas resources. Repeals the windfall profits tax. Introduced on March 26, 1987. Referred to Committee on Finance.

S. 971 (Sen. Johnston)

Repeals the windfall profits tax and imposes a tax on imported crude oil and petroleum products. Introduced on April 9, 1987. Referred to Committee on Finance.