Similar to last year’s budget request, the Fiscal year 2011 budget request eliminates several longstanding oil and gas subsidies. TCS is pleased to see the President’s continued commitment to eliminating fossil fuel subsidies reflected in the budget request, and is eager to see a more aggressive plan to cut unnecessary and wasteful subsidies to the profitable oil, gas and coal industries.
Ending eight tax preferences to the oil and gas industry will save taxpayers an estimated $36.536 billion from 2011-2020. Taxpayers would save $17.314 billion by repealing the Domestic Manufacturing Tax Deduction for oil and gas companies, $7.839 billion by repealing expensing of intangible drilling costs and $10.026 billion by terminating Percentage Depletion for oil and natural gas wells. In addition, the budget terminates several oil and gas research and development programs, saving taxpayers $240 million from 2011-2020 and reforms the Foreign Tax Credit, ending a multi-billion dollar tax loophole for businesses. The President proposed similar terminations in last year's budget for the same subsidies.
On top of the cuts proposed last year, the President's FY2011 budget includes four new eliminations of coal industry tax preferences, saving taxpayers $2.28 billion from 2011-2020. This includes a $413 million savings from ending tax write-offs for coal exploration and $1.06 billion for repealing percentage depletion for hard mineral fossil fuels. Combined, the President's fossil fuel subsidy eliminations would save taxpayers $38.816 billion from 2011-2020. Now it's up to Congress to enact these eliminations and completely end tax preferences for the established and profitable coal, oil and gas industries.
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