A few days ago House Speaker Boehner told ABC news he was open to the idea of raising taxes on oil and gas companies. Boehner said that while “everybody wants to go after the oil companies” for gas prices that are climbing above $4 per gallon in many regions of the country, the industry also has “got some part of this to blame.”
“Listen, they’re gonna pay their fair share in taxes, and they should,” Boehner said. Boehner also said he does not believe “the big oil companies need to have the oil depletion allowances” and that “we certainly oughta take a look at” proposals to do away with some industry incentives.
Naturally, this has created a lot of buzz. However, a meaningful tax increase on oil and gas companies remains unlikely. Here’s why…
What you haven’t heard as much about is that Boehner’s spokesman quickly made clear that the congressman’s comments were not a change from his previous position, which is generally representative of many House Republicans and contains no real commitment to tax increases. Despite the hype following Boehner’s comments, there’s virtually no support among House Republicans for raising taxes on energy companies along the lines of the Obama proposals:
OBAMA ENERGY TAX HIKES
Proposed Tax/10 Year Federal Tax Revenue
Elimination of domestic
manufacturing deduction / $18.3B
Eliminate expensing of
intangible drilling costs / $12.5B
depletion for oil and
natural gas wells / $11.2B
Increase geological and
period for independent
producers to seven years / $1.4B
In fact, far from tax increases, the House is likely to consider two bills next week that promote domestic production of oil and gas. Legislative analysts are also quick to point out that the Senate has voted on some of the tax increases favored by Obama and other Democrats twice in the past year and both times they failed to win even a simple majority (never mind 60 votes). Back in February a Senate vote on raising taxes on oil and gas companies received only 44 votes.
Unless something dramatic happens in the short term, those votes aren’t going anywhere.
Let me hear your opinion on which way the legislative wind is blowing! Please give us your comments.