For Further Information, Contact: Pete Sepp, (703) 683-5700 or pressguy@ntu.org
(Alexandria, VA) – In anticipation of the White House’s assent to apledge at the G-20 Summit to cut domestic fossil fuel subsidies, the362,000-member National Taxpayers Union (NTU) cautioned the U.S. governmentagainst using this forum as leverage to distort domestic energy markets. NTUExecutive Vice President Pete Sepp offered the following statement:
“Althoughit is clear most countries subsidize their energy sectors, many Americans wouldbe surprised to learn that foreign nations often subsidize so-called fossilfuel development very aggressively. In contrast to other nations, evidence inIEA’s newly released 2010 World Energy Outlook and from other sources such asthe Joint Committee on Taxation shows U.S. energy policy tilts toward bestowingfavors on alternative sources while penalizing oil and natural gas.
OECDcountries, like America, tax oil far more than they subsidize it. Moreover, many policies labeled as ‘subsidies’ for oil and gas firms inthe 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 multinationalshelp ensure that our domestic businesses are not double-taxed on income alreadytaxed abroad. These tax provisions serve as tools to incentivize investment invarious sectors of the American economy and to maintain our competitiveness inthe global market.
Withoutother major reforms to the corporate tax system, efforts to repeal Section 199or take away the dual capacity protections from our domestic oil and gascompanies will only make us less competitive abroad. Nearly every proposal to do so in this Congress has been little morethan a politically convenient revenue-raising ploy that will hurt one of thefew industries that has kept creating jobs and investment opportunities in oursluggish economy.”
Theinitial reference to the Administration’s position at the G20 meeting came froma White House press briefing on November 1st; however, PresidentObama has repeatedly called for repeal of Section 199 and dual capacity for theoil, gas and coal industries to "pay for" other legislative initiatives.
NTUbelieves 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 whichsources are viable. Policymakers should neither favor nor punish particularindustries or companies.
NTU is a nonpartisan, nonprofit citizen groupfounded in 1969 to work for lower taxes, smaller government, and economicfreedom at all levels. Note: Further information on NTU’s energy and taxpolicy work is available at www.ntu.org.
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