List of Tax Reform Good News

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Posted by John Kartch on Friday, July 30th, 2021, 1:22 PM PERMALINK

1,233 examples of pay raises, new job creation, facility and product line expansions, special bonuses, utility rate reductions, 401(k) match increases and employee benefit increases attributed to the Tax Cuts and Jobs Act:

Full A-Z national compilation (PDF)

State lists:

Ala.   Alaska   Ariz.   Ark.   Calif.   Colo.   Conn.   Del.  D.C.   Fla.   Ga.   Hawaii   Idaho   Ill.   Ind.   Iowa   Kan.   Ky.   La.   Maine   Md.   Mass.   Mich.   Minn.   Miss.   Mo.   Mont.   Neb.   Nev.   N.H.   N.J.   N.M.   N.Y.   N.C.   N.D.   Ohio   Okla.   Ore.   Pa.   R.I.   S.C.    S.D.   Tenn.   Texas   Utah   Vt.   Va.   Wash.   W. Va.   Wis.   Wyo.

Specialized lists:

Opportunity Zones

Small businesses

Manufacturers

Craft beverage producers

Utilities

Examples of companies providing new employee and family benefits

(Pictured at top: The Tax Cuts & Jobs Act helped Rod’s Harvest Foods in St. Ignatius, Montana raise employee wages and bonuses)

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Rep. Kevin Hern, Ways and Means Republicans Urge Biden Admin to Not Repeal FDII Tax Rules

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Posted by Alex Hendrie on Friday, July 30th, 2021, 12:45 PM PERMALINK

Congressman Kevin Hern (R-Okla.) last week led a letter urging Janet Yellen, the secretary for the Department of the Treasury, to reconsider repealing the foreign derived intangible income (FDII) tax rules. 

Rep. Hern was joined by all Republican members of the Ways and Means Committee: Ranking Member Kevin Brady (R-Texas), Devin Nunes (R-Calif.), Rep. Adrian Smith (R-Neb.), Rep. Jodey C. Arrington (R-Texas), Rep. Vern Buchanan (R-Mich.), Rep. Ron Estes (R-Kan.), Rep. Drew Ferguson (R-Ala.), Rep. Mike Kelly (R-Pa.), Rep. Darin LaHood (R-Ill.), Rep. Carol D. Miller (R-Ohio), Rep. Tom Reed (R-Ill.), Rep. Tom Rice (R-S.C.), Rep. David Schweikert (R-Calif.), Rep. Jason Smith (R-Mo.), Rep. Lloyd Smucker (R-Pa.), Rep. Jackie Walorski (R-Ind.), and Rep. Brad Wenstrup (R-Ohio).

President Biden has proposed repealing the FDII deduction as part of his Fiscal Year 2022 budget. In all, Biden has called for 30 tax increases totaling almost $3 trillion over the next decade.

If this tax increase goes into effect, it will ship American intellectual property and jobs overseas, creating long-term economic damage to the country. This proposal would undermine American competitiveness and benefit foreign countries like China that provide extensive and generous tax credits and subsidies to incentivize IP.

What is FDII? 

FDII is one of several international tax provisions passed into law in the 2017 Tax Cuts and Jobs Act. FDII acts in concert with another provision, GILTI (global intangible low-tax income) to apply a “carrot and stick” approach to the taxation of intangible income (income derived from rents, royalties etc.) that is easily allocated to low-tax jurisdictions. 

Under this system, U.S. taxpayers are provided a tax cut on foreign income generated from IP held in the U.S. They face a corresponding tax penalty on income from IP held overseas. 

FDII provides the benefit through a deduction for qualifying “deemed intangible income” equal to 37.5 percent, creating an effective rate of 13.125 percent on qualifying income when taken against the current 21 percent corporate rate.

Effective 2026, the FDII deduction will decrease to 21.87 percent, creating a 16.41 percent rate on qualifying income. 

Repealing FDII would benefit America’s rivals like China and Europe 

By repealing FDII, the Biden administration would disadvantage U.S. businesses with foreign competitors in China and Europe. Compared to the tax provisions offered by many countries, the tax benefit associated with FDII is relatively modest. However, repealing it threatens to leave American businesses vastly far behind foreign competitors when it comes to promoting IP. 

For instance, China recently enacted a 200 percent “super deduction” for eligible research and development expenses and has a preferential 15 percent tax rate for high-tech enterprises.    

Promoting American IP will help U.S. competitiveness and job creation 

As it stands, the U.S. already provides relatively modest tax benefits to IP in comparison to the generous tax subsidies provided by many foreign countries. 

In fact, according to a 2020 study by the Information Technology & Innovation Foundation, the U.S. ranks 24th out of 34 comparable countries in the Organization for Economic Cooperation and Development (OECD) of the four-member BRICs (Brazil, Russia, India, and China). 

The U.S. is significantly behind in this space and policymakers should be doing more, not less to promote IP. Doing so would have significant economic benefits for American workers and businesses. 

According to a 2016 study by the United States Patent and Trademark Office, IP-intensive industries directly and indirectly supported over 45 million jobs, or about thirty percent of all American workers. These jobs are high-paying – a worker in IP intensive industry earned an average of 46 percent higher wages than the average wage of workers in a non-IP intensive industry. 

Similarly, the Bureau of Labor Statistics found that jobs tied to R&D pay an average of $134,978 – 2.4 times higher than the average wage. 

There is Strong Historical Support for Incentivizing IP Through the Tax Code 

In the past, Democrats and Republicans believed that the tax code should help encourage IP in the U.S. For instance, a 2015 Senate Finance Committee International Tax Reform Working Group co-chaired by Senator Rob Portman (R-Ohio) and Senator Chuck Schumer (D-NY) concluded that Congress should encourage the development and ownership of IP in the US: 

“The co-chairs agree that we must take legislative action soon to combat the efforts of other countries to attract highly mobile U.S. corporate income through the implementation of our own innovation box regime that encourages the development and ownership of IP in the United States, along with associated domestic manufacturing. They continue to work to determine appropriate eligibility criteria for covered IP, a nexus standard that incentivizes U.S. research, manufacturing, and production, as well as a mechanism for the domestication of currently offshore IP.” 

At the time, there were several proposals by lawmakers to create new tax incentives to promote American IP. For instance, as a report by the Congressional Research Service noted, Congressman Richie Neal (D-Mass.) had one proposal while Senator Dianne Feinstein (D-Calif.) had another: 

“Proposals for a patent box in the United States include a draft proposal by Representatives Boustany and Neal, the Innovation Promotion Act of 2015, proposed legislation made by Senator Feinstein in the 112th Congress, and a bill introduced by Representative Schwartz in the 113th Congress (H.R. 2605). The Feinstein proposal provided a 15% tax rate on income from patents developed and used for manufacture in the United States, whereas the Boustany-Neal proposal and H.R. 2605 allowed a 71% deduction of income, which produces an effective 10% statutory rate on income in the patent box.” 

As Rep. Hern states in his letter, “We know that when the businesses and workers in our districts have a level playing field, they can compete and win, even in an increasingly competitive global marketplace.” 

All lawmakers should object to repealing FDII tax rules, so as to maintain American competitiveness and protect American intellectual property and jobs. 

Photo Credit: U.S. House of Representatives


ATR Supports Sen. Ron Johnson's Bill to Repeal Obamacare’s Failed Multi-State Program

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Posted by Isabelle Morales on Friday, July 30th, 2021, 12:25 PM PERMALINK

Americans for Tax Reform today sent a letter to Senator Ron Johnson (R-Wis.) in support of his bill to repeal Obamacare’s failed Multi-State Program, the Repeal Insurance Plans of the Multi-State Program Act (RIP MSP Act). This attempt at a "public option" failed, yet continues to cost taxpayers money.

The cosponsors of this important piece of legislation include Senators Wicker (R-Miss.), Hyde-Smith (R-Miss.), Toomey (R-Pa.), Lee (R-Utah), Lummis (R-Wyo.), Barrasso (R-Wyo.), Braun (R-Ind.), Cramer (R-N.D.), Lankford (R-Okla.), Inhofe (R-Okla.), Blackburn (R-Tenn.), and Paul (R-Ky.).

Click here to view the letter or read below.

 

July 30, 2021 

The Honorable Ron Johnson
United States Senate
328 Hart Senate Office Building
Washington, DC 20510

Dear Senator Johnson: 

I write in support of the Repeal Insurance Plans of the Multi-State Program Act (RIP MSP Act), legislation you have introduced to repeal Obamacare’s failed Multi-State Program. This “multi-state” program has failed miserably, yet still costs taxpayers millions of dollars each year. All members of Congress should support and co-sponsor this important piece of legislation.  

ATR also applauds the existing cosponsors of this bill, Senators Wicker (R-Miss.), Hyde-Smith (R-Miss.), Toomey (R-Pa.), Lee (R-Utah), Lummis (R-Wyo.), Barrasso (R-Wyo.), Braun (R-Ind.), Cramer (R-N.D.), Lankford (R-Okla.), Inhofe (R-Okla.), Blackburn (R-Tenn.), and Paul (R-Ky.).

Section 1334 of the Affordable Care Act required the Office of Personnel Management to contract with at least two national health plans to offer coverage to Americans in all fifty states. At least one of these plans had to be a non-profit health plan. These plans were intended to compete directly with private insurance plans in each state. 

Only one state, Arkansas, agreed to offer an MSP option in 2019. After spending $54 million trying to implement this plan nationwide, 49 states and the District of Columbia declined to participate. One reason for was that insurers were concerned with meeting regulatory standards from the federal government and all 50 sets of state regulators.  

The MSP had a flawed structure. Companies were not incentivized to participate and many were actively turned off by the idea of participating. At one point, OPM even attempted to entice more insurers to participate by relaxing requirements to sell statewide. Still, insurers were uninterested. 

In many ways, this program is a step toward the creation of a “public option” health plan, which if fully implemented, will lead to massive tax hikes, healthcare shortages, and cause damage to healthcare providers.

This was not Obamacare’s only attempt at moving towards a public option. In 2013, the ACA had established 23 Consumer Operated and Oriented Plans (CO-OPs), nonprofit insurance plans designed to compete with health insurance companies. Today, only three of these co-ops remain. Evidently, both MSPs and co-ops are prime examples of how a “public option” might fare in the United States. Unfortunately, taxpayers had to lose billions of dollars to come to this seemingly obvious conclusion.

The MSP, specifically, was ill-advised and ill-planned. It was not subject to any congressional hearings, committee consideration, or debate. Democratic advisors at the time, like John McDonough, described the discussion around this policy as “definitely not a thoughtful, nuanced conversation.” 

Still, taxpayers continue to pay for administrative costs to run this program.  

I urge all Senators to support the RIP MSP Act to repeal the Obamacare Multi-State Program. Not only will this important legislation repeal a failed provision of Obamacare that was a steppingstone toward the public option, but it will also save taxpayers millions of dollars.

 

Onward,

Grover Norquist

President, Americans for Tax Reform

Photo Credit: Gage Skidmore


ATR Opposes Congressional Effort to Keep Adults Smoking Cigarettes

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Posted by Karl Abramson on Thursday, July 29th, 2021, 4:55 PM PERMALINK

Earlier today, Americans for Tax Reform sent a letter to the United States Senate in opposition to the Resources to Prevent Youth Vaping Act, legislation that takes aim at e-cigarette manufacturers and the lifesaving products they produce. Should the proposal be enacted, vape manufacturers would be required to pay user fees to the Food and Drug Administration (FDA) that would be used to increase awareness of the “danger” of e-cigarettes, even though vaping has been conclusively shown to be 95% less harmful than traditional cigarettes. 

While it is obvious that underage persons should not be consuming e-cigarettes, this bill would lead to an increase cigarette consumption, harming the health of American youths more than e-cigarettes ever could. 

Tim Andrews, ATR’s Director of Consumer Issues, wrote: “It would be incredibly cruel to force e-cigarette manufacturers to fund FDA misinformation. The products that these businesses creating are saving lives every day. Further, e-cigarettes have the potential to decrease socioeconomic disparities in healthcare by aiding disadvantaged populations with smoking cessation.” 

Cigarette smoking is the leading cause of preventable death in the United States and is responsible for roughly 480,000 deaths every year. Public policy, particularly when related to public health, must take into account all available data and evidence. This proposal fails to consider the lifesaving benefits of e-cigarettes. It will keep adults smoking, and dying from, traditional cigarettes.” 

Andrews concluded: “E-cigarettes are not tobacco products. There is no reason for Congress to impose rules and regulations that treat them as such. Vaping products are the most effective method of helping smokers quit the deadly habit of cigarettes and there is zero evidence demonstrating e-cigarettes are a pathway to cigarette smoking. Rather, more than 60 public health organizations agree that e-cigarettes are a pathway away from smoking. In the interests of public health, we call upon you to accept the science and vote against the Resources to Prevent Youth Vaping Act. Millions of lives quite literally depend upon it.” 

The full letter can be read here.

Photo Credit: David Maiolo

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Members of Congress Promote Cigarette Smoking with Push to Vilify Vape Businesses

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Posted by Karl Abramson on Thursday, July 29th, 2021, 3:53 PM PERMALINK

On July 23, 2021, a group of eight bipartisan legislators in the United States Senate and House of Representatives introduced the Resources to Prevent Youth Vaping Act, legislation that would force e-cigarette manufacturers to fund an anti-vaping misinformation campaign with fees paid to the Food and Drug Administration (FDA).  

A press release that accompanied the introduction of the bill contained numerous myths, misconceptions, and downright lies about e-cigarettes and the vaping industry. It is highly disappointing that the six U.S. Senators and two Representatives sponsoring the legislation have chosen to engage in fear-based deception, rather than accepting the science on e-cigarettes.  

However, the problem is larger than just a few misguided lawmakers. More than half of adult cigarette smokers, the people for who vaping was invented, believe that e-cigarettes are at least as harmful, or more harmful, than traditional cigarettes. This could not be farther from the truth, as vaping has been scientifically shown to be 95% safer than cigarettes.  

Legislation like the Resources to Prevent Youth Vaping Act exacerbates this problem and will keep more adults smoking, and dying from, traditional cigarettes. As such, it is crucial to communicate the truth about vaping. Let’s examine some of the allegations from the press release. 

Claim: “Electronic nicotine devices should be subject to the same user fees that the FDA assesses on the manufacturers and importers of cigarettes and other forms of tobacco” - Senator Mitt Romney (R-Utah) 

Truth: E-cigarettes and traditional cigarettes share very few characteristics. E-cigarettes heat a nicotine-containing liquid to create a vapor. Cigarettes have a combustion process which creates tar and other harmful chemicals that cause cancer, heart disease, and other serious illnesses. Vaping does not have a combustion process, allowing users to consume nicotine while decreasing the harm they are subjected to. Nicotine is not a carcinogen. Rather, it is a highly addictive but relatively benign substance, much like caffeine, that does not cause short or long-term harm when separated from the dangerous chemicals in cigarettes. 

Claim: “We know the numbers – more and more teens and high school students are using vapor products.” - Senator Lisa Murkowski (R-Alaska) 

Truth: Clearly, Senator Murkowski does not know the numbers. According to data from the Center for Disease Control and Prevention, the number of underage persons who had vaped nicotine in the past 30 days decreased by 27.2% between 2019 and 2020. National Youth Tobacco Survey Data, the most recent data available, shows that past-30-day youth vaping rates are lower today than they were in 2015. 

Claim: “Big Vape has hooked nearly four million kids on e-cigarettes, creating a vaping epidemic that is threatening our next generation with a lifetime of nicotine addiction and disease.” - Senator Richard Durbin (D-Ill.) 

Truth: Senator Durbin’s attempt to demonize vaping manufacturers by branding them “Big Vape” is unequivocally false. The Small Business Administration, a government agency that provides support to American entrepreneurs, has correctly noted that “small businesses created the (vaping) industry and have been drivers of the industry’s major innovations”. 

More Truth: There are not four million kids “hooked” on e-cigarettes. Senator Durbin would like you to believe that a teenager who vapes once or twice a month is addicted to vaping but that, of course, is not true. Approximately 3% of teenagers are daily users of vape products and 67% of daily users previously smoked cigarettes. Obviously, no teenagers should be using vaping products but teenage cigarette smokers who switch to vaping are reducing the harm they are exposed to. Senator Durbin would prefer they smoke. 

Even More Truth: There is zero evidence that vaping causes disease. Shockingly, Senator Durbin is wrong once again. 

The bill was introduced by U.S. Senators Mitt Romney (R-Utah), Jeanne Shaheen (D-N.H.), Lisa Murkowski (R-Alaska), Richard Durbin (D-Ill.), Susan Collins (R-Maine), Tammy Baldwin (D-Wis.), and U.S. Representatives Cheri Bustos (IL-17), and Brian Fitzpatrick (PA-01). 

Shortly after the bill was introduced, Americans for Tax Reform sent a letter to members of the U.S. Senate and House of Representatives, urging them to oppose this disastrous proposal. That letter can be read here

Photo Credit: Piqsels

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Senate GOP Unified Against Biden’s Second Death Tax

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Posted by Regina Kelley on Thursday, July 29th, 2021, 3:42 PM PERMALINK

Recently, all 50 Senate Republicans sent a letter urging President Biden not to repeal stepped-up in basis, raising taxes on family-owned businesses. If step-up in basis is repealed, family-owned businesses would suffer much higher tax liabilities, hurting the businesses themselves and those they employ.

The letter was signed by Senate Minority Leader Mitch McConnell (R-Ky.), Senate Minority Whip John Thune (R-S.Dak.), Senator Finance Committee Ranking Member Mike Crapo (R-Idaho) and Senators John Boozman (R-Ariz.), Chuck Grassley (R-Iowa) and Steve Daines (R-Mont.). Biden proposed removing the stepped-up in basis provision in his budget along with trillions of dollars of other tax increases.

Stepped-up in basis is a provision that allows decedents to pass down their family businesses by protecting it against double taxation. This is done by “stepping up” the purchase price of the asset to the current market value. Repealing stepped-up in basis means that the unrealized gains passed down to the heirs of a family business would be taxed. This tax would be separate from, and in addition to, the existing 40 percent death tax.

Not only would this be a tax increase, but it would also increase tax complexity. If a taxpayer is unable to determine how much they bought the asset for, they may need to pay the 43.4 percent capital gains tax on the entire value of that asset, many of which could have been bought decades ago.

The letter outlines the many problems with President Biden’s proposal to remove stepped-up in basis, including job-loss and increased tax liability. 

A study by E&Y that found by removing stepped-up in basis, the federal government would eliminate 80,000 jobs each year over the next decade. 

Another study from Texas A&M Agricultural and Food Policy Center found that 98 percent of the farms in its 30-state database would be impacted with a median increase in tax liabilities of $726,104 per farm. 

Many asset-rich, cash-poor businesses would have to liquidate their assets or lose their entire business if the Biden Administration imposes this second death tax. In a Ways and Means Committee Hearing, multiple American business owners explained how removing stepped-up in basis would harm their businesses and force their heirs to pay a tax that would force them to liquidate their assets.

Senate Republicans should be applauded for standing up for family-owned business and standing against the massive tax increases that Biden is proposing.

Photo Credit: Gage Skidmore


ATR Leads Coalition in Support of Rep. Ronny Jackson's Amendment to Prohibit IRS Political Targeting

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Posted by Isabelle Morales on Thursday, July 29th, 2021, 10:30 AM PERMALINK

ATR today led a coalition of conservative organizations in support of Congressman Ronny Jackson’s (R-Texas) amendment to prohibit the IRS from targeting individuals or organizations based on their political affiliation. This amendment has been ruled in order for Division D of H.R. 4502, the appropriations minibus which includes additional funding for the IRS.

The Internal Revenue Service has a long history of political discrimination. Oftentimes, those responsible are not punished nor held accountable. At the very least, this spending package should implement important safeguards to protect the American people from the IRS’s abuse.

Click here to view the letter or read below.

 

July 29, 2021

Dear Member of Congress:

We write in support of Congressman Ronny Jackson’s amendment to prohibit the IRS from targeting individuals or organizations based on their political affiliation. This amendment has been ruled in order for Division D of H.R. 4502, the appropriations minibus being considered by the House this week.

The IRS has a history of targeting conservative organizations and individuals. Most notably, under the Obama administration, the IRS targeted conservative groups applying for nonprofit status ahead of the 2012 election. Under the lead of IRS Exempt Organizations Director Lois Lerner, the agency screened the applications of conservative organizations based on their names and policy positions, subjecting those applications to heightened scrutiny and inordinate delays, and demanding information that was unnecessary for the determination of their tax-exempt statuses.

A 2017 Senate Finance Committee report found that just one conservative nonprofit organization received tax-exempt status over a three-year period between 2009 and 2012. No IRS employee was disciplined for this scandal. The Obama Department of Justice closed its investigation with no charges, and Lerner was allowed to retire with a pension and a bonus.

Rep. Jackson’s amendment would prohibit future targeting of individuals or organizations based on their political affiliation. We urge all members of Congress to support and vote for this important, commonsense proposal.

 

Sincerely,

Americans for Tax Reform

American Commitment

Institute for Liberty

Club for Growth

Center for a Free Economy

Less Government

Center for Freedom and Prosperity

Council for Citizens Against Government Waste 

National Taxpayers Union

Texas Public Policy Foundation

60 Plus Association

Frontiers of Freedom

Photo Credit: U.S. House of Representatives


ATR Joins Coalition Letter Opposing Restrictive Price Controls

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Posted by Bryan Bashur on Wednesday, July 28th, 2021, 3:21 PM PERMALINK

Today, ATR joined a coalition of conservative organizations in opposition to the implementation of a federally mandated cap on interest rates. The letter was addressed to the Senate Committee on Banking, Housing, and Urban Affairs to express the negative consequences this unnecessary government regulation will have on consumer loan products.

Senate Democrats are expected to announce the reintroduction of the misguided Veterans and Consumers Fair Credit Act. This bill, if enacted, will make it harder for Americans to access short-term loans. The interest rate cap in the bill would restrict access to lending because lenders will not be able to properly account for risk. This bad policy would also potentially hamper credit card rewards programs.

Congress should work to enact legislation that will enable greater consumer access to credit, not limit consumer credit options. 

The full letter can be found here.  

Photo Credit: kuhnmi


ATR Leads Coalition Letter Opposed to Short Sale Transparency and Market Fairness Act


Posted by Alex Hendrie on Tuesday, July 27th, 2021, 5:44 PM PERMALINK

ATR today led a coalition of conservative organizations in opposition to H.R. 4618, the Short Sale Transparency and Market Fairness Act. This legislation will impose unprecedented and unnecessary government overreach in financial markets that would harm retirees and the broader U.S. economy.

If enacted into law, H.R. 4618 would expand reporting mandates under Section 13(f) of the Securities Exchange Act to require monthly reporting of investments held by investors and asset managers, including derivatives, security-based swaps, and other financial instruments that provide immense value to millions of Americans, including through public pensions and charities. The bill would sharply increase the frequency of filings from quarterly to monthly, while reducing the time to prepare filings from 45 days after the end of a quarter to 10 days after the end of the month.

Instead of meddling in the markets with unprecedented, unnecessary, and harmful mandates, Congress should work to reduce regulatory burdens on investors, retirees, and pensioners.

The full letter can be found here.

 


Report: U.S. Energy Sector Supports Millions of Jobs That Would Be Threatened By Dem Tax Hikes

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Posted by Isabelle Morales on Tuesday, July 27th, 2021, 4:00 PM PERMALINK

The oil and gas industry is a driver of every other sector in the U.S. economy and supports millions of high-paying American jobs, according to a new study prepared by PricewaterhouseCoopers (PwC). This study shows why Americans should be alarmed at efforts by President Biden and Congressional Democrats to raise taxes on oil and gas businesses through the repeal of various tax provisions, including the deduction for intangible drilling costs (IDCs).

IDCs allow independent producers to immediately deduct business expenses related to drilling such as labor, site preparation, repairs, and survey work. The deduction for IDCs is consistent with immediate expensing offered to all business investments.  

If this provision is repealed, it could have significant, negative economic impacts in several states. As the study notes, the onshore upstream oil and gas sector, which relies on the deduction for IDCs, contributes 3.2 million jobs across the economy, including 690,500 direct jobs.  

In certain states, the economy depends heavily on these onshore projects, including in West Virginia, Texas, and Oklahoma:  

  • In West Virginia, there are 39,000 onshore supported jobs, accounting for 4.5% of the state’s total employment.  
  • In Louisiana, there are 153,000 onshore supported jobs, accounting for 7.0% of the state’s total employment.
  • In New Mexico, there are 72,000 onshore supported jobs, accounting for 6.5% of the state’s total employment.  
  • In North Dakota, there are 58,000 onshore supported jobs, accounting for 10.0% of the state’s total employment.  
  • In Oklahoma, there are 257,000 onshore supported jobs, accounting for 11.0% of the state’s total employment.  
  • In Texas, there are 1,549,000 onshore supported jobs, accounting for 8.6% of the state’s total employment.  

 

Investing in these drilling projects is risky. After all, drilling a well does not guarantee that oil and gas will be found. IDCs enable American producers to continue exploring even after unsuccessful endeavors. As Energy Tax Facts explains, “Removing this 100-year-old tax provision from the code would not only strip away roughly 25 percent of the capital available for independent producers to continue looking for new oil and natural gas, but also diminish the many economic benefits created by those activities.” 

If the IDC deduction is eliminated, as President Biden has proposed, many of the jobs the PwC study highlights could be eliminated. As noted in a 2014 study by Wood Mackenzie consulting, repealing the immediate deduction for IDCs would cost 265,000 jobs in the long-term.  

More broadly, the PwC study notes that the oil and gas industry supports 11.3 million total American jobs across all 50 states and accounts for nearly 8 percent of GDP.

These jobs are high paying. In 2017, these jobs paid an average salary of $102,000, 85 percent higher than the average private sector salary. 

Democrat members of Congress whose districts rely on this industry should stand with their workers and reject efforts to raise taxes on American manufacturing. For example, Democratic members of Congress from Texas represent numerous districts where the oil and gas industry employs thousands of Americans: 

  • Texas District 7: Rep. Lizzie Fletcher - 
    • 43,760 Direct Jobs, 152,080 Total Jobs, 19.8% of Jobs in District 
    • 33.3% of District’s Total Labor Income 
       
  • Texas District 15: Rep. Vicente Gonzalez –  
    • 11,840 Direct Jobs, 47,860 Total Jobs, 11.6% of Jobs in District 
    • 14.9% of District’s Total Labor Income 
       
  • Texas District 28: Rep. Henry Cuellar - 
    • 15,020 Direct Jobs, 48,660 Total Jobs, 13.8% of Jobs in District 
    • 20.0% of District’s Total Labor Income 
       
  • Texas District 29: Rep. Sylvia Garcia -  
    • 11,320 Direct Jobs, 53,760 Total Jobs, 15.3% of Jobs in District 
    • 24.6% of District’s Total Labor Income 
       
  • Texas District 32: Rep. Colin Allred –  
    • 19,620 Direct Jobs, 99,110 Total Jobs, 14.1% of Jobs in District 
    • 24.7% of District’s Total Labor Income 
       
  • Texas District 33: Rep. Marc Veasey – 
    • 7,000 Direct Jobs, 44,720 Total Jobs, 8.3% of Jobs in District 
    • 10.1% of District’s Total Labor Income 

 

For decades, progressive Democrats and activist groups have undertaken a coordinated attack on reliable sources of energy produced in the United States, including oil and natural gas, through schemes like cap-and-trade, bans on hydraulic fracturing, the Green New Deal, and tax hikes all aimed at “keeping it in the ground.” These kinds of schemes are a direct threat to millions of high-paying manufacturing jobs, which the Left has claimed to be a champion of. 

Photo Credit: Lorie Shaull


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