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Obama Budget Proposes $100 Billion in Tax Hikes on Energy Producers


Posted by Chris Prandoni on Tuesday, March 4th, 2014, 1:41 PM PERMALINK


Obama Energy Tax Proposals

The President’s FY 2015 budget contains billions in tax increase on energy production and consumption. These taxes will result in higher prices at the pump, increased utility bills, and fewer American jobs as companies flee the U.S. and companies cannot recover their investments. Below is a breakdown of energy taxes Obama put forth in his 2015-2024 budget:

Tax Increase

FY 2015

FY 2015-2024

 Industry Impact

Increase Amortization Period for G&G

$100 million

$3.1   billion

$3.1 billion

Double-taxing Dual-Capacity taxpayers

$550 million

$10.4 billion

$10.4 billion

Repeal Percentage Depletion:

  • Oil and Natural Gas
  • Hard Minerals

 

$1 billion
$167 million

 

$13 billion
$2 billion

 

$13 billion
$2 billion

Repeal Intangible Drilling & Expensing of Exploration Cost for Coal

  • Oil and Natural Gas
  • Hard Mineral

 

 

 

$2.3 billion
$39 million

 

 

 

$14.4   billion
$680 million

 

 

 

$14.4 billion
$680 million

Section 199

  • Oil and Natural Gas
  • Hard Mineral

 

$1 billion
$36 million

 

$14.2 billion
$726 million

 

$14.2 billion
$726 million

Repeal Tertiary Injectants

$10 million

$100 million

$ 100 million

Reinstate Superfund barrel of oil excise tax

$1.6 billion

$23.2  billion

$ 11.6 billion

Retroactively repeal LIFO accounting

$4 billion

$82 billion

$29 billion

Repeal Passive Loss

$7 million

$74 million

$74 million

Ratchet up Oil Spill Liability Trust Fund tax

$60 million

$1 billion

$1 billion

That’s an energy tax increase of nearly $100 billion by 2024!

ATR Recommendation

Allow all employers to deduct all of their business expenses in the year they are incurred. In the same budget President Obama argues for full business expensing for small businesses, he looks to lengthen – or eliminate entirely – cost recovery mechanisms for America’s energy producers. This sort of duplicity is not only inequitable, but hamstrings the American economy.

Investment is essential to economic growth. The easiest and fairest way to ensure businesses spend money is to allow them to recoup their expenditures immediately, not depreciate or amortize expenses over arbitrary periods of time. Needlessly tying up capital in strange depreciation tables only exacerbates our current economic morass; yet, this is exactly what President Obama is advocating.

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