Obama Deficit Plan Targets Oil And Gas Tax Breaks, Farm Subsidies

"US President Barack Obama on Monday introduced a wide-ranging proposal to save the federal government $3 trillion over the next 10 years by cutting spending and raising taxes, including the repeal of a number of tax subsidies for the oil and gas industry." ...

"The Obama plan estimates an increase of $41 billion in revenue over 10 years by eliminating a number of tax credits and deductions for the oil and gas industry. These include eliminating the depletion allowance for oil and gas wells; repealing the use of the domestic manufacturing deduction for oil and gas production; eliminating the use of deductions for intangible drilling costs; and eliminating the use of a deduction for 'any tertiary injectant used as part of a tertiary recovery method.'

Also, the plan would stop oil and gas companies from taking an exception to passive loss limitations, and require a two-year amortization of the geological and geophysical expenditures of independent oil and gas producers, instead of the current seven-year amortization.

The Obama plan also proposes saving $66 million by requiring oil and gas companies pay drilling permit fees to the Bureau of Land Management. The industry could also be hit with a 9.7-cent/barrel excise tax on crude oil and imported petroleum products, to fund cleanup of hazardous waste sites under the Superfund program. ...

The Obama plan would also target tax breaks to the coal industry, which the administration estimates could mean an additional $2 billion to federal coffers over 10 years."

Derek Sands reports for Platts September 19, 2011.

SEE ALSO:

"Obama's Deficit Plan Cuts Billions in Subsidies To Farmers" (Minneapolis Star Tribune)

"Obama Economic Proposal Takes Aim at Direct Subsidies To Farmers" (Des Moines Register)

Press Release: "Obama’s Debt Reduction Plan Would Eliminate Wasteful Farm Subsidies" (Environmental Working Group)

"Parties Clash on Disaster Funding as House Seeks Clean-Tech Cuts" (ClimateWire)

"The Combined Effect of the Obama EPA Rules" (Economic Policy Institute)

"Obama Deficit Plan Targets Farm Subsidies, Crop Insurance" (Insurance Journal)

Source: Platts, 09/20/2011