The nation’s oil and gas industry would be hit with at least eleven tax hikes under President Biden’s Fiscal Year 2023 budget proposal that was released this week.
In all, his budget includes 36 tax increases on American individuals and business totaling $2.5 trillion over the next decade.
The 11 tax increases come as the U.S. is feeling the pain of record-high gasoline prices.
The organization, Americans for Tax Reform identified the oil and gas industry tax hikes.
9. Repeal expensing of intangible drilling costs (IDCs): $10.7 billion tax increase
10. Repeal enhanced oil recovery credit: $1.56 billion tax increase
11. Repeal credit for oil and natural gas produced from marginal wells: $1.9 billion tax increase
12. Repeal exception to passive loss limitations provided to working interests in oil and natural gas properties: $83 million tax increase
13. Repeal percentage depletion with respect to oil and natural gas wells: $13 billion tax increase
14. Increase geological and geophysical amortization period for independent producers: $10.2 billion tax increase
15. Repeal expensing of exploration and development costs: $932 million tax increase
16. Repeal percentage depletion for hard mineral fossil fuels: $2.3 billion tax increase
17. Repeal capital gains tax treatment for royalties: $595 million tax increase
18. Repeal the exemption from the corporate income tax for fossil fuel publicly traded partnerships: $1 billion tax increase
19. Repeal the Oil Spill Liability Trust Fund (OSTLF) excise tax exemption for crude oil derived from bitumen and kerogen-rich rock: $404 million tax increase
20. Eliminate the tax exemption for crude oil derived from bitumen and kerogen-rich rock from the superfund: $873 million tax increase
21. Eliminate drawback for the Oil Spill Liability Trust Fund: $698 million tax increase
While the oil and gas industry doesn’t support the tax hikes, the Biden administration and environmentalists applaud the President’s proposals. His $5.8 trillion plan calls for $3.3 billion spending on clean energy growth.
“My budget lowers family energy costs with tax credits to help people make their homes more efficient, research and development to broaden the reach of solar and build a clean energy future,” Biden told reporters this week.
Other money would go toward offshore wind energy projects.
Climate change is a strong theme in Biden’s budget, something that is supported by the Bipartisan Policy Center where managing director of the energy project, Lesley Jantarasami was quoted as saying the budget reveals ideal funding for Biden’s climate agenda.
At the Natural Resources Defense Council, John Bowman, managing director for government affairs applauded the environmental goals of the budget. He described it as a “call for assertive action on climate now.”
Adding to the pressure on the oil and gas industry is the latest effort of Democrats in the Senate and House who unveiled legislation to cut into oil company profits so consumers can see relief at the pump.
POLITICO reported Sen. Sheldon Whitehouse (D-R.I.), and Rep. Ro Khanna (D-Calif.) led a push Wednesday to pass the the Big Oil Windfall Profits Tax Act that would force big producers to pay 50 percent of the difference between the current price of a barrel of oil and the pre-pandemic average price per barrel between 2015 and 2019, and return that money to consumers as rebates.
In another effort, Rep. Sean Casten, a Democrat from Illinois is behind a move to create rebates with a repeal of oil and gas subsidies reported POLITICO.