Greedy Democrats seek to raise taxes on energy companies
More than a dozen oil and gas trade groups on Friday blasted a leading Senate tax plan that takes aim at incentives long cherished by the industry.This appears to be part of a redistribution scheme which takes money from productive job creation and transfers it to inefficient alternative energy projects that have cost tax pyers billions and produce little of value and few long term jobs.
At issue is a proposal by Sen. Max Baucus, D-Mont., that would bar oil and gas companies from immediately writing off intangible drilling costs, such as repairs, site preparation and hauling supplies. The draft plan also would bar taxpayers from claiming a percentage depletion for oil and natural gas wells. And it would force U.S. companies to abandon the “last in first out” (LIFO) accounting technique that allows oil stockpiles and other inventories to be valued at the most recent price paid when calculating net profit and taxable revenue.
And in a broad change that would cut across all industries, Baucus’ plan would bar firms from using accelerated depreciation to write off capital expenditures immediately.
But the changes could discourage investment, said the groups, including the American Petroleum Institute, Independent Petroleum Association of America, America’s Natural Gas Alliance and the American Fuel and Petrochemical Manufacturers.
Extending the time for writing off drilling and other expenses “will take cash away from capital-intensive businesses like ours and significantly reduce future domestic investment,” the groups said. “In addition, proposals to extend depreciable lives and eliminate valid, long-standing accounting methods like LIFO, will also significantly hurt energy businesses seeking to grow and invest in new capital projects.”
The groups stressed that the oil and natural gas industry “has provided one of the few bright spots as the economy struggles toward recovery” and “is poised to make even greater capital investments in domestic energy projects all across the United States.
But to do that, API and the other groups said, “we must have a tax code that not only encourages growth in such investments, but allows us to continue our track record of creating jobs, growing the economy and strengthening our energy security.”