CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Baucus Unveils Major Energy Tax Package

Baucus Unveils Major Energy Tax Package

by Mike Godfrey,, Washington

19 June 2007

Senate Finance Committee Chairman Max Baucus (D-Mont.) last week unveiled a package of energy tax incentives designed to encourage more investment in clean fuels, to be paid for by the repeal of certain tax breaks for big oil and gas companies.

Baucus’s five point energy plan promotes the development of clean and green power, alternative vehicles and biofuels, and the responsible use of coal. It also encourages energy savings and expanded refinery capacity.

Baucus said that the Committee will consider, amend, and vote on the fully offset $13.7 billion Chairman’s Mark today.

“We have to make a real turn toward sustainable energy policy in this country, and this package of tax provisions will help to chart the right course. I’m working with my colleagues to extend some provisions, such as the clean energy production tax credit, even further when the Finance Committee votes,” stated Baucus. “This Chairman’s Mark gives real incentives to produce and use brand-new energy technologies, and encourages better ways of making energy with the fuels we have today.”

The Baucus measure contains a new tax credit for the production of cellulosic ethanol. It also has new initiatives to promote wind energy, including a new residential tax credit, and incentives for manufacturing wind energy equipment and connecting rural wind facilities to the energy grid.

Other new proposals include provisions to speed the development of plug-in hybrid vehicles, and provisions to increase the economic viability of capturing carbon from coal. Following is a summary of the mark’s objectives and provisions.

There are four offsets in the Baucus bill. The first is a repeal of the manufacturing deduction for the major oil and gas companies’ domestic manufacturing activities. As with other oil and gas incentives, the manufacturing deduction has been left intact for smaller independent domestic producers.

The second revenue raiser is a revision to the foreign tax credit rules as they apply to oil and gas activities. This proposal leaves intact the foreign tax credit so that US companies are not subject to double tax on their foreign oil and gas income. Baucus explained that by treating oil and gas exploration and production income the same way as downstream manufacturing income, the foreign tax credit rules are simplified and rationalized.

The third revenue raiser is a package of anti-fuel-fraud excise tax fraud proposals. This package of proposals continues the Finance Committee’s efforts to reduce the tax gap in the fuel excise tax area.

The fourth revenue raiser extends the excise tax on oil which is dedicated to the oil spill trust fund. This trust fund is used to cleanup oil spills.

“It is critical for our country’s economic security and competitiveness to change direction on energy policy and make investments in renewable energy, energy efficient automobiles, carbon sequestration and cellulosic ethanol. And we must be fiscally responsible in finding new and better ways to fuel America and break our dependence on foreign oil,” argued Baucus, adding: “The large oil companies are likely to see profits approaching a trillion dollars over the next ten years, and so we divert less than one percent of their profits to America’s energy security.”

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »