Energy Taxes
McCain vs. Obama
Issue Area |
Current Law |
McCain |
Obama |
Windfall Profits Tax |
None |
None |
|
None |
60% below 1990 levels |
80% below 1990 levels |
|
Gas Tax Holiday |
None |
18.4¢ per gallon tax break |
None |
Domestic production tax deduction |
Domestic production tax deduction |
(Repealed) |
|
Energy Stock Dividend Rate |
15% |
15% |
39.6% |
Energy Corporate Income Tax |
35% |
25% |
35% |
Ethanol Tax Credit |
0¢ (Repealed) |
51¢ per gallon |
|
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0¢ (Repealed) |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 |
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.