Senate Finance Committee Chairman Max Baucus (D-MT) “struck while the iron was hot Thursday and vowed to shepherd a plan through the panel that ends billions of dollars in tax breaks for the largest oil companies,” The Hill reports.
Baucus released a short “blueprint” of the plan – which would expand investment in “clean” fuels and efficient vehicles – the same day that oil giants Exxon and Shell reported big gains in first-quarter profits.
And the outline arrives a day after Senate Majority Leader Harry Reid (D-Nev.) said he planned to bring a tax break repeal measure to the floor. The White House and Democrats are targeting the subsidies in the wider political debate that has erupted over high gasoline prices.
The plan would “prevent the five biggest oil companies from claiming a lucrative deduction on domestic manufacturing income, reduce the foreign tax credit for royalty payments to foreign governments and impose an excise tax on certain Gulf of Mexico leases, the blueprint states.”
The plan would “not add to the deficit because repealing the oil industry tax incentives would pay for the ‘clean’ energy programs in the bill, according to the Senate Finance Committee.”
Filed under Energy, Taxes
Majority Leader Harry Reid (D-NV) “said Wednesday that the Senate will turn quickly to legislation to repeal billions of dollars in government subsidies enjoyed by big oil companies every year,” the AP reports.
Majority Leader Harry Reid, D-Nev., said the Senate will consider as early as next week Obama’s proposal to repeal the tax breaks. Obama wants to use that $4 billion a year to invest in alternative energy in an effort to reduce the country’s dependence on foreign oil.
"There’s no necessity for these subsidies," Reid told reporters. "The companies have broken all records for profits."
It’s not at all clear “that Senate Democrats would be able to overcome a certain GOP filibuster of legislation to repeal the tax breaks, which include a deduction for drilling costs and oil and gas depletion allowances that give producers a tax deduction comparable to the break given manufacturers for depreciation of the value of an investment in plants and equipment.”
Senator Tom Coburn (R-OK) “said Sunday he can accept tax reform that increases overall tax revenue as part of a comprehensive deficit reduction plan,” CNN reports.
Republican Sen. Tom Coburn of Oklahoma told the NBC program "Meet the Press" that if lowering tax rates and eliminating loopholes and deductions ended up bringing in more money to the U.S. government, "that would be fine with me."
Asked about a pledge he signed previously against any kind of tax increase, Coburn said his more important pledge was to do what’s best for the country. He also noted that political reality dictated the need for bipartisan support for any agreement to pass.
"This isn’t about politics as normal," Coburn said. "It’s about making a decision now that is urgent."
Coburn is one of six senators taking part in bipartisan talks on a deficit reduction blueprint. While they have yet to reach final agreement, the senators participating in the so-called "Gang of Six" want their work to serve as an impetus for both sides to meet somewhere in the middle on the deficit reduction issue.
Senator Orrin Hatch (R-UT) “poses a significant obstacle to any bipartisan deficit reduction deal in the Senate that would raise taxes, according to Senate aides and activists,” The Hill reports.
Hatch would have significant say over any deficit-reduction as ranking Republican on the Senate Finance panel, which has jurisdiction over taxes, Social Security, Medicare and Medicaid.
He told conservative activists shortly before the April recess that he would oppose any deficit-reduction package that raises taxes, period.
“He has stressed no tax increases,” said Grover Norquist, president of Americans for Tax Reform, a prominent anti-tax group, speaking of assurances Hatch made at a recent Tax Day event with conservatives. “That’s what he told me when he was at the April 14 press conference. Hatch was there and stressed no tax increases. Period.”
Senate sources say Hatch has taken an equally hard line in discussions within the Senate.
“Hatch has been insistent on no new taxes,” said a Senate aide.
Senator Tom Coburn (R-OK), who is part of the “gang of six” currently working on a deficit reduction proposal, said Thursday that “the group could call for tax increases on some people but that taxes would not be raised by a significant amount.”
“There’s no plan to have a significant tax hike on anyone,” Coburn said on Laura Ingraham’s radio show.
But Coburn has not ruled out tax increases altogether.
“Will some people pay increased taxes? I’m sure they will,” Coburn said.
Majority Whip Dick Durbin (D-IL) tells the New York Post he may propose “sweeping legislation to tax all online purchases — in a move aimed at closing state budget shortfalls” this week.
Durbin’s bill, dubbed the Main Street Fairness Act, is being portrayed as an end to the tax holiday that online shoppers on major Internet vendors like Amazon.com, Overstock.com and even Apple’s App stores have been enjoying for years.
Online companies already pay state taxes in the states in which they reside, but many politicians, including those in New York, Illinois and Connecticut, recently have been pushing to collect taxes from customers on purchases made outside the state if the sites have vendors that physically reside within their states.
Durbin’s proposal “intends to push Internet vendors to collect state taxes on items purchased out of state.”
Senator Tom Coburn (R-OK) gave the Republican address today. In discussing this week’s speech on the deficit, he says President Obama “failed to put a serious proposal on the table.”
“Our nation is facing a $14.3 trillion national debt that our own military leaders call the greatest threat to our national security. In these challenging times, we need real leadership to bring us together. As Americans, there is not a problem that we can’t solve if we are together. And unfortunately, in his speech this week on the deficit, President Obama took us three steps backwards.
“Instead of describing the threat and bringing both sides together, the president attacked those who have a different vision of the government.
“As leaders we have a moral obligation to tell the country the truth. The truth is, is we could face a serious debt crisis sooner than anyone expects. We face an unsustainable debt and unsustainable entitlement programs like Medicare, Medicaid and Social Security. All of which will collapse if they’re not reformed.”
On government waste:
“The president also underestimated how much we could save by going after waste, fraud and abuse. In just six years of oversight in my office alone, we have identified more than $350 billion in annual waste in the federal government. The president says he wants to use a scalpel, but as a physician, let me tell you, when it comes to waste and duplication at the federal government level, we don’t need a scalpel. We need a chain saw.”
On tax reform:
“Finally, on the issue of tax reform, the president walked away from serious bipartisan compromise on tax reform reached by his very own deficit commission on which I served. Our blueprint lowered tax rates for everyone, and reduced the deficit by stimulating real economic growth. The president’s plan undermines our bipartisan agreement by calling for rate increases that will slow the economic growth that he so much wants.”
Finally, on the issue of earmarks, Senator Coburn says Congress is “on pace to have zero earmarks” this year.