Energy Taxes
McCain vs. Obama

Issue Area

Current Law

McCain

Obama

Windfall Profits Tax

None

None

$15 Billion

Cap and Trade

None

60% below 1990 levels

80% below 1990 levels

Gas Tax Holiday

None

18.4¢ per gallon tax break

None

Manufacturer’s deduction for domestic energy production

Domestic production tax deduction

Domestic production tax deduction

(Repealed)
$13.5 Billion
tax increase

Energy Stock Dividend Rate

15%

15%

39.6%

Energy Corporate Income Tax

35%

25%

35%

Ethanol Tax Credit

51¢ per gallon

0¢ (Repealed)

51¢ per gallon

Taxes on Foreign Subsidiaries

None

None

35%

Ethanol Tariff Tax Rate

54¢ per gallon

0¢ (Repealed)

54¢ per gallon

New Energy Tax Credits

Yes

Yes

Yes

Development of Nuclear Energy

No Plan

45 Nuclear Plants by 2030, 100 total goal

No Plan

The windfall profits tax would cost oil companies $15 billion a year based upon their 2007 profit levels.

A cap and trade system is an excise tax on emissions.  Like other excise taxes, cap and trade will pass on the negative effects to consumers through higher energy prices.

Section 199 provides a production tax deduction to all domestic manufacturers.  The Energy Independence and Security Act of 2007 called to repeal this deduction for domestic oil companies, increasing their taxes by $13.5 billion over ten years.

Currently, businesses can defer taxes on overseas earnings until they are repatriated back to the United States at the corporate income tax rate of 35%.  Repealing this ability to defer earnings will increase taxes on the overseas operations of every U.S. energy company.  Consumers will feel the tax increase through higher energy prices.  Click here for more information on the effect of taxes on foreign subsidiaries.

No nuclear power plant has been built in the U.S. in more than 30 years. The U.S. gets 20% of our electricity from 104 working commercial reactors, many nearing the end of their operating license time-period