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Press Release


Taxpayer Group Cautions White House on Using G20 Summit as Excuse for Energy Tax Hikes

November 11, 2010

For Further Information, Contact: Pete Sepp, (703) 683-5700 or pressguy@ntu.org

(Alexandria, VA) – In anticipation of the White House’s assent to a pledge at the G-20 Summit to cut domestic fossil fuel subsidies, the 362,000-member National Taxpayers Union (NTU) cautioned the U.S. government against using this forum as leverage to distort domestic energy markets. NTU Executive Vice President Pete Sepp offered the following statement:

      “Although it is clear most countries subsidize their energy sectors, many Americans would be surprised to learn that foreign nations often subsidize so-called fossil fuel development very aggressively. In contrast to other nations, evidence in IEA’s newly released 2010 World Energy Outlook and from other sources such as the Joint Committee on Taxation shows U.S. energy policy tilts toward bestowing favors on alternative sources while penalizing oil and natural gas.

     OECD countries, like America, tax oil far more than they subsidize it. Moreover, many policies labeled as ‘subsidies’ for oil and gas firms in the U.S. are actually tax-law provisions (like the Section 199 deduction) available to many industries ranging from filmmakers to coffee roasters. So-called ‘dual-capacity’ protections for U.S.-based oil and gas multinationals help ensure that our domestic businesses are not double-taxed on income already taxed abroad. These tax provisions serve as tools to incentivize investment in various sectors of the American economy and to maintain our competitiveness in the global market.

      Without other major reforms to the corporate tax system, efforts to repeal Section 199 or take away the dual capacity protections from our domestic oil and gas companies will only make us less competitive abroad. Nearly every proposal to do so in this Congress has been little more than a politically convenient revenue-raising ploy that will hurt one of the few industries that has kept creating jobs and investment opportunities in our sluggish economy.”

      The initial reference to the Administration’s position at the G20 meeting came from a White House press briefing on November 1st; however, President Obama has repeatedly called for repeal of Section 199 and dual capacity for the oil, gas and coal industries to "pay for" other legislative initiatives.

      NTU believes that the ideal energy policy, for both the U.S. and other countries, is one that allows consumers working through the free market to decide which sources are viable. Policymakers should neither favor nor punish particular industries or companies.

      NTU is a nonpartisan, nonprofit citizen group founded in 1969 to work for lower taxes, smaller government, and economic freedom at all levels. Note: Further information on NTU’s energy and tax policy work is available at www.ntu.org.

 

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