“The Chamber will consider votes on, or in relation to, [the bill] — including votes on cloture on the motion to proceed — in our annual How They Voted scorecard,” Josten said.
Democrats say the bill, which would slash a series of tax breaks for the five largest oil companies, would save $21 billion over 10 years. The savings would be used to reduce the deficit.
But the Chamber said it does not support efforts to trim the deficit by eliminating oil companies' tax breaks.
“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,” Josten said. “Bad tax policy and bad energy policy are not antidotes for the poison of the federal deficit.”
The legislation is “misguided, unwarranted, and ultimately counterproductive,” Josten said, arguing the bill could “result in lost jobs and ultimately decrease supply and increase energy costs for businesses relying on oil and gas.”
The nonpartisan Congressional Research Service and the Joint Economic Committee both say the bill will not affect fuel prices.
The tax breaks repeal bill faces an uphill battle in the Senate Wednesday. Two previous attempts to eliminate oil industry tax breaks failed in the chamber.
Here is the full letter:
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