Joint Committee on Taxation

Tax reform and the energy sector: looking for winners and losers

The optimal position for your industry in any tax reform is to see general tax rates drop while also keeping all of your old subsidies.  The political lobbying on these bills is enormous, and given the scale of the energy sector in the US economy, and the need to transition towards lower carbon fuel sources, it seemed important to look at the tax reform proposals through the lens of energy.

Joint Committee on Taxation was already flagging oil and gas subsidies in the 1920s

The Joint Committee on Taxation of the US Congress has gradually posted many of its publications going back as early as 1926.  Special tax rules for natural resources were a focus of JCT's attention even in its earliest days.  By the mid-1920s, standard cost depletion had already been jettisoned for discovery value.  Under cost depletion, taxpayers could write off what they'd invested in the mining property.  Discovery value depletion introduced subsidization, as it allowed the write off of the value of minerals at the time of discovery, even if that value was more than the investm

Senate happy to routinely extend $30b in tax breaks; not so happy to assess whether the subsidies do what they were supposed to

One important provision dropped from the Senate's "compromise" tax bill was a requirement that the the Joint Committee on Taxation and the Government Accountability Office actually evaluate tax provisions regularly "extended": by Congress to see if they are accomplishing what they were originally intended to accomplish.

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