Key Vote Letter Opposing S. 940, the "Close Big Oil Tax Loopholes Act"
May 16, 2011
TO THE MEMBERS OF THE UNITED STATES SENATE:
The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, strongly opposes S. 940, the “Close Big Oil Tax Loopholes Act,” because levying new taxes and fees on America’s oil and gas industry would increase U.S. dependence on foreign oil, increase costs to consumers, jeopardize U.S. jobs, and erode economic competitiveness.
Taxes, new fees, and other attempts to restrict domestic energy production have been proven to increase reliance on imported energy and to increase costs for consumers. The lack of more robust domestic energy production is a failure of Congress and the Administration. Legislation intended to punish energy companies for the government’s failure is misguided, unwarranted, and ultimately counterproductive.
For example, the denial and limitations of the Section 199 deduction for oil and gas companies provided in S. 940 could discourage energy investment, result in lost jobs and ultimately decrease supply and increase energy costs for businesses relying on oil and gas. Furthermore, the proposed modification of the foreign tax credit rules for U.S. oil and gas companies would place domestic firms at a competitive disadvantage to foreign oil and gas manufacturers.
Some supporters of S. 940 indicate that this legislation is necessary for deficit reduction.While the Chamber believes that deficit reduction is a laudable goal, this goal should be achieved through spending cuts that address the root cause of the deficit, and not thru punitive taxation. Bad tax policy and bad energy policy are not antidotes for the poison of the federal deficit.
In sum, the Chamber strongly opposes the targeting of specific industries to offset or pay for Congress’ inability to affect sound fiscal policy that achieves meaningful deficit reduction, and urges Congress to address fundamental comprehensive energy policy. The Chamber will consider votes on, or in relation to, S. 940 – including votes on cloture on the motion to proceed – in our annual How They Voted scorecard.
R. Bruce Josten