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Environment & Energy
Related: About this forumThe Tax Bills Gift to Big Coal
The legislation is a boon to fossil fuel companies not only because of what it includes, but what it doesn't.By now, its no secret that the sweeping tax reform package approved by Congress last week includes a bunch of provisions that help the oil and gas industry. As the Washington Post reported, cutting the corporate income tax rate alone will likely add $1 billion to the profits of U.S. oil and gas exploration and production firms. Oil refining companies stand to do even better, according to one analyst who estimated that those companies earnings per share will increase by an average of 23 percent. The tax bill also opens up the Arctic National Wildlife Refuge in Alaska, the largest wildlife refuge in America, to drilling.
But theres also something to be said about what the tax bill didnt change: the billions of dollars in permanent, century-old tax subsidies for the fossil fuel industry. According to Oil Change International, the U.S. federal government provides a combined $14.7 billion in various annual subsidies for the fossil fuel industry, the vast majority of which remained untouched in the tax bill. And while the majority of those subsidies favor the oil and gas industry, 20 percent go toward incentivizing coal consumption and production. Whats more, the effective tax rate for coalwhich is less than 1 percentstays the same. In other words, the government still sacrifices billions in revenue every year to prop up coal, an industry that most energy analysts agree is dying.
The coal industry fares incredibly well [with the tax bill], said Janet Redman, the U.S. policy director of Oil Change International. None of the handouts that they get now are taken away. They chug ahead with every tax break theyve enjoyed last year, the year before, and some that have been in the books for decades. Theyve lost nothing.
The coal industry does lose something, though its fairly small. The tax bill eliminates Section 199 of the U.S. tax code, which allows companies to deduct income attributable to domestic production activities. That means there will be no more so-called domestic manufacturing deduction for mining, which allows mining companies to claim a tax break intended for the manufacturing of goods. That subsidy cost the government about $45 million last year, according to the groups most recent report on fossil fuel subsidies.
More: https://newrepublic.com/article/146388/tax-bills-gift-big-coal
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The Tax Bills Gift to Big Coal (Original Post)
Rhiannon12866
Dec 2017
OP
mountain grammy
(26,608 posts)1. Gee, almost as if these industries had "input" into this bill.
It ain't for nothing these men get rich.
underpants
(182,730 posts)2. So coal gets about $2.8 B a year in subsidies, how about green/renewables?
This says $4B total in investments but I'm not sure if this the whole number.
Federal Government Exceeds $4 Billion Goal for Renewable Energy and Energy Efficiency Investments
https://energy.gov/eere/articles/federal-government-exceeds-4-billion-goal-renewable-energy-and-energy-efficiency
Rhiannon12866
(205,074 posts)3. There were already reports that the tax bill could hurt renewables:
The Tax Reform Bill Could Hurt Wind and Solar Power
The Republican tax plan headed for a vote in the Senate could halt the rapid growth in solar and wind power in the United States.
An obscure provision of the tax bill part of a provision to limit tax deductions for certain overseas activities threatens a financing mechanism that generated $13 billion in investment in U.S. renewable energy this year, according to energy research firm Bloomberg New Energy Finance.
This is Defcon One, says Gregory Wetstone, president of the American Council On Renewable Energy. It would simply undermine the financial structure that is critical for renewable energy and bring a booming sector to a halt.
<snip>
The Senate tax bill would create a tax on such investments provided by multinational corporations. The exact rate of that tax would vary from company to company, but could be as high as 100% in some cases. It would also apply retroactively to previous tax years, meaning headaches for companies that have financed renewable energy projects in the past.
Still, the provision could wind up not becoming law even as the tax bill appears increasingly likely to pass. BNEF analyst Stephen Munro described the potential harm to the renewable energy industry as collateral damage rather than a deliberate attempt to hurt wind and solar power. That fact increases the chances that lobbyists will succeed in pushing the Senate to strike the provision. The tax bill that passed the House of Representatives does not contain a similar provision.
https://www.democraticunderground.com/1127114112
The Republican tax plan headed for a vote in the Senate could halt the rapid growth in solar and wind power in the United States.
An obscure provision of the tax bill part of a provision to limit tax deductions for certain overseas activities threatens a financing mechanism that generated $13 billion in investment in U.S. renewable energy this year, according to energy research firm Bloomberg New Energy Finance.
This is Defcon One, says Gregory Wetstone, president of the American Council On Renewable Energy. It would simply undermine the financial structure that is critical for renewable energy and bring a booming sector to a halt.
<snip>
The Senate tax bill would create a tax on such investments provided by multinational corporations. The exact rate of that tax would vary from company to company, but could be as high as 100% in some cases. It would also apply retroactively to previous tax years, meaning headaches for companies that have financed renewable energy projects in the past.
Still, the provision could wind up not becoming law even as the tax bill appears increasingly likely to pass. BNEF analyst Stephen Munro described the potential harm to the renewable energy industry as collateral damage rather than a deliberate attempt to hurt wind and solar power. That fact increases the chances that lobbyists will succeed in pushing the Senate to strike the provision. The tax bill that passed the House of Representatives does not contain a similar provision.
https://www.democraticunderground.com/1127114112
underpants
(182,730 posts)4. It looks like Grassley and Heller got that stripped out at the end
https://mobile.nytimes.com/2017/12/16/climate/tax-bill-wind-solar.html?referer=https://www.google.com/
But those rollbacks were removed from the final legislation. Several Republican senators, including Charles E. Grassley of Iowa and Dean Heller of Nevada, had opposed the House bills changes. Wind turbines now provide more than one-third of Iowas electricity, and Mr. Grassley, who has expressed doubt about global warming, has nonetheless emerged as a staunch defender of wind power. Tesla is building a major battery factory in Nevada, and Mr. Heller has argued that the electric-vehicle credits are needed to support a fledgling industry.
Not everyone was entirely pleased with the final outcome. The American Council on Renewable Energy, an industry trade group, said it remained concerned about changes that lawmakers had made to an arcane provision known as the Base Erosion Anti-Abuse Tax, which is intended to stop multinational companies from shifting profits overseas.
But those rollbacks were removed from the final legislation. Several Republican senators, including Charles E. Grassley of Iowa and Dean Heller of Nevada, had opposed the House bills changes. Wind turbines now provide more than one-third of Iowas electricity, and Mr. Grassley, who has expressed doubt about global warming, has nonetheless emerged as a staunch defender of wind power. Tesla is building a major battery factory in Nevada, and Mr. Heller has argued that the electric-vehicle credits are needed to support a fledgling industry.
Not everyone was entirely pleased with the final outcome. The American Council on Renewable Energy, an industry trade group, said it remained concerned about changes that lawmakers had made to an arcane provision known as the Base Erosion Anti-Abuse Tax, which is intended to stop multinational companies from shifting profits overseas.