Lawmakers Urge Repeal of Fossil Fuel Tax Provisions
Lawmakers Urge Repeal of Fossil Fuel Tax Provisions
- AuthorsJayapal, Rep. PramilaOmar, Rep. IlhanKhanna, Rep. RoBlumenauer, Rep. EarlLee, Rep. BarbaraNewman, Rep. Marie
- Institutional AuthorsU.S. House of Representatives
- Subject Area/Tax Topics
- Industry GroupsEnergy
- Jurisdictions
- Tax Analysts Document Number2021-36587
- Tax Analysts Electronic Citation2021 TNTF 183-14
September 22, 2021
The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
H-232, The Capitol
Washington, D.C. 20515
The Honorable Steny Hoyer
Majority Leader
U.S. House of Representatives
H-107, The Capitol
Washington, D.C. 20515
Dear Speaker Pelosi and Leader Hoyer:
As leaders in the Congressional Progressive Caucus, we urge you to include the repeal of domestic fossil fuel subsidies in the Build Back Better Act. As you know, President Biden called for eliminating “billions of dollars in subsidies, loopholes, and special foreign tax credits for the fossil fuel industry” in his American Jobs Plan.1 We were dismayed to see that the current version of the Build Back Better Act in the House is missing most of the domestic fossil fuel subsidies repeal passed by the Senate Finance Committee earlier this year.
There is no reason that the fossil fuel industry deserves special privileges over other businesses. The American Petroleum Institute even admitted earlier this year, “If you want to take the entire tax code and treat the oil and gas industry as every other industry, we're happy to do that.”2
Fossil fuel subsidies should be repealed because, instead of creating jobs, they widen the profit margins of fossil fuel companies, with “over 96% of subsidies going directly to profits over and above the minimum investment hurdle rates.”3
In particular, the following subsidies must be repealed:
1. Deduction for Intangible Drilling Costs
2. Percentage Depletion for Oil and Gas Wells
3. Last-In, First-Out (LIFO) Accounting for Fossil Fuel Companies
4. Tar Sands Tax Loophole
Amid an unprecedented and deadly climate emergency, we agree with Speaker Pelosi that, “[i]t's long past time to turn off the spigot of public funds flowing to Big Oil.”4 We implore you to do just that and, in the process, fund the President's agenda to create jobs, expand economic opportunity, and tackle the climate crisis.
Sincerely,
Representative Pramila Jayapal
Chair
Congressional Progressive Caucus
Representative Ilhan Omar
Whip
Congressional Progressive Caucus
Representative Ro Khanna
Deputy Whip
Congressional Progressive Caucus
Representative Earl Blumenauer
Member
Congressional Progressive Caucus
Representative Barbara Lee
Chair Emeritus
Congressional Progressive Caucus
Representative Marie Newman
Member
Congressional Progressive Caucus
Cc:
James McGovern, Chairman
House of Representatives Committee on Rules
FOOTNOTES
1White House, Fact Sheet: The American Jobs Plan (Mar. 31, 2021) (online ate https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/); Department of the Treasury, General Explanations of the Administration's Fiscal Year 2022 Revenue Proposals (May 2021) (online at https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf).
2Subcommittee on Environment, Committee on Oversight and Reform, Hearing on The Role of Fossil Fuel Subsidies in Preventing Action on the Climate Crisis (Apr 22, 2021) (online at https://oversight.house.gov/legislation/hearings/on-the-role-of-fossil-fuel-subsidies-in-preventing-action-on-the-climate-crisis).
3Ploy Achakulwisut, Peter Erickson, and Doug Koplow, Effect of subsidies and regulatory exemptions on 2020-2030 oil and gas production and profits in the United States, Environmental Research Letters (Jul. 29, 2021) (online at https://iopscience.iop.org/article/10.1088/1748-9326/ac0a10).
4Office of Nancy Pelosi, Speaker of the House, Pelosi Floor Speech Calling for the End of Taxpayer Subsidies of Big Oil (May 5, 2011) (online at https://www.speaker.gov/newsroom/pelosi-floor-speech-calling-end-taxpayer-subsidies-big-oil).
END FOOTNOTES
- AuthorsJayapal, Rep. PramilaOmar, Rep. IlhanKhanna, Rep. RoBlumenauer, Rep. EarlLee, Rep. BarbaraNewman, Rep. Marie
- Institutional AuthorsU.S. House of Representatives
- Subject Area/Tax Topics
- Industry GroupsEnergy
- Jurisdictions
- Tax Analysts Document Number2021-36587
- Tax Analysts Electronic Citation2021 TNTF 183-14