President Joe Biden’s plan to eliminate subsidies claimed by oil and gas companies and increase levies on people who pollute companies would increase government revenue by $ 35 billion over the next decade.
The benefits of these grants are currently concentrated “in a handful of large companies,” the Treasury said in the Made In America Tax Plan released Wednesday. The report expands the fiscal proposals of Biden’s $ 2.25 trillion economic package, presented last week.
The plan is likely to be fulfilled resistance of the oil and gas industry and its supporters on Capitol Hill. Biden already surprised many executives in the early months of his presidency by canceling the Keystone XL pipeline and restricting drilling to federal lands.
“The main impact would be on the profits of the oil and gas companies,” the Treasury said in the report. “The research suggests little impact on gasoline or energy prices for American consumers and little impact on our energy security.”
Tax gift
Estimated benefit from fossil fuel subsidies on U.S. production in 2018
Source: “Producer Benefits of Implicit Subsidies to Fossil Fuels in the United States” by Matthew Kotchen, Yale University, and the National Bureau of Economic Research.
Oil and gas producers benefit from elements of the tax code that allow them to deduct drilling costs at the beginning of a project’s life cycle and can report losses for several years. Industry groups have said these measures are not specific to fossil fuels and are designed to encourage investment.
However, Biden’s fiscal plan was clear in its intention to distinguish the oil and gas industry, while providing a number of incentives to clean up energy, resistance to climate change and carbon storage. .
“Tax preferences for oil, gas and coal producers today are lowering their tax liabilities relative to other companies,” the Treasury said. “In addition, fossil fuel companies benefit from substantial implicit subsidies, as they sell products that create externalities but do not have to pay for the damage caused.”
The paper cited academic research published by Proceedings of the National Academy of Sciences he found EQT Corp., Exxon Mobil Corp., BP Plc, Chesapeake Energy Corp i Chevron Corp. were the top five beneficiaries of “implicit subsidies” to fossil fuel producers in 2018.