- Energy Tax Facts
- 13 Dec 13
Industry Responds to Chairman Baucus’ Tax Proposal
On December 13th, the Independent Petroleum Association of America (IPAA), American Petroleum Institute (API), America’s Natural Gas Alliance (ANGA), and other industry leaders sent a letter to Chairman Baucus regarding his recent tax reform proposal and its impact on a major recent success stories in the American economy – the oil and natural gas industry.
As Rigzone reports:
The groups noted that the U.S. oil and gas industry has been one of the few bright spots as the United States seeks to recover from the economic downturn, and that recent polls show U.S. voters broadly support domestic energy investment and are against taxes that could raise their energy costs.
“The industry has invested hundreds of billions of dollars to develop our nation’s oil and gas reserves, expand our refining capacity and develop innovative new technologies to meet the energy demands of a growing economy,” the groups said in the letter.
“This investment has created tens of thousands of high paying jobs and billions of dollars in new revenue for the government,” the groups added. “These are exactly the types of investments tax policy should encourage and support.”
As IPAA President Barry Russell highlighted in November 2013, removing the intangible drilling costs (IDCs) deduction from America’s tax code would have far reaching impacts across the American economy. In fact, a recent study by Wood Mackenzie found repealing the IDCs would cost 190,000 jobs within the next year alone while forcing producers to cut back their production by 15 to 20 percent annually, reducing industry spending by $407 billion between 2014 and 2023. That means fewer jobs for hard working Americans, less revenue for state and local governments, and fewer tax dollars making their way into the federal treasury.
Eliminating the IDC deduction would jeopardize the continued responsible development of American energy while costing jobs and hurting the economy. This is clearly the wrong choice for the future of our national tax code.
