Senate Finance Committee Chairman Max Baucus, D-Mont., released a plan Thursday to write legislation that would end billions of dollars in tax breaks for large multinational oil and gas companies.

The bill would follow through on a letter that President Obama sent Tuesday to congressional leaders urging them to end oil industry tax subsidies at a time of surging gasoline prices and record profits at the major oil companies (see Obama Urges Elimination of Oil Producer Tax Breaks).

Baucus said the plan would provide a blueprint for legislation that he plans to draw up in his committee. The bill would also provide incentives for renewable energy and fuel-efficient vehicles.

“Now is not the time to stand idly by while large oil and gas companies get billions of dollars in tax breaks,” Baucus said in a statement. “Now is the time to take concrete steps toward cleaner, more affordable, domestically produced energy. Reducing dependence on foreign oil isn’t easy, but this plan puts us on a path toward a clean, affordable energy future that works for our planet—and our pocketbooks.”

Baucus’s domestic energy plan outlines three policy goals: promote demand for domestically produced energy, encourage the use of fuel-efficient vehicles, and invest in clean energy infrastructure. To pay for these investments, the bill would eliminate tax incentives for the largest oil and gas companies and not add to the deficit. Baucus said the plan would create jobs domestically by increasing alternative energy production in the U.S. Baucus plans to provide further details on the plan after discussions with colleagues on the Finance Committee. Congress is currently in recess, but is scheduled to return next week. 

The plan calls for repealing tax breaks for the largest oil and gas companies. It would end tax incentives for the five largest oil and gas companies, which announced tens of billions of dollars in first-quarter profits this week. This includes the elimination of the Section 199 manufacturing deduction, reduction in the foreign tax credit for royalty payments to foreign governments and the imposition of an excise tax on certain Gulf oil leases.

The plan also aims to promote demand for clean, domestic fuel. It would encourage greater production of cleaner and more affordable domestically produced fuel by making it easier for manufacturers to produce and for consumers to purchase.

The Baucus plan would also incentivize fuel-efficient vehicles. To increase demand for the most fuel-efficient vehicles, it would provide incentives for the purchase of these vehicles and encourage manufacturers to increase production.

The plan also calls for building a clean energy infrastructure, providing incentives to build the necessary infrastructure, such as alternative energy fueling stations, needed to support clean energy vehicles.

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