House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) is calling for removal of oil-and-gas industry tax breaks if subsidies for green energy are also eliminated.
Upton’s comments, given at a Monday-night debate with Democratic challenger Mike O’Brien, arrive a week after Mitt Romney said billions of dollars in oil industry tax breaks would likely be jettisoned under his proposal to lower the overall corporate tax rate.
The Kalamazoo Gazette reported Upton’s comments and provided audio of the remarks here.
Upton bashed the federal loan guarantee for the failed solar energy company Solyndra — the source of a lengthy Energy Committee probe — in arguing that aid for the oil and renewable energy industries alike should be removed.
“Let’s let all of these energy companies compete on their own. Let’s have a very serious discussion about removing any subsidy that puts one form of energy ahead of the other. Let’s let the marketplace determine that. Supply and demand is a pretty good system that works, and let’s have that in place,” Upton said.
But stripping incentives for green energy has faced pushback from advocates who say that, unlike mature fossil fuel industries, low-emissions renewable sources should continue receiving the federal aid.
Upton voted in 2011 to maintain oil industry tax incentives, but those proposals were not coupled with repeal of green energy incentives.
Upton, who was first elected to his southwest Michigan seat in 1986, is considered a safe bet to win another term.
The Hill’s race ratings list his seat as “likely” to remain in Republican hands.
Romney’s comments last week were met with a lukewarm reception from oil industry groups, which have battled hard — and successfully — to maintain an array of incentives.
Trade group officials said they were open to discussion of Romney’s idea of removing their incentives while lowering the overall rate, but didn't rush to embrace the idea.
Upton, like Romney, broadly said that the tax code should be overhauled to lower rates while removing deductions.
“You see, we have the highest corporate tax rate in the world. When you lower that to 25 percent — all the loopholes, get rid of them. Special subsidies? Get rid of them. Lower the rate and we will bring jobs back that have gone overseas. And we ought to be doing the same thing on the individual tax code, too. It's way too complex. You've got to be able to simplify that. It ought to be bipartisan and I'm convinced it will happen for the right reasons,” he said, according to a transcript.
While Upton discussed tax policy changes, it’s the Ways and Means Committee, not the Energy and Commerce Committee he leads, that has jurisdiction over tax policy.
Nonetheless, the election-season remarks arrive as oil and green energy tax policy is facing increased scrutiny.
The wind industry is battling hard to preserve a key incentive. The production tax credit, which the industry calls vital to financing new power projects, is slated to lapse at year’s end unless Congress extends it.
Romney favors letting the wind incentive expire while President Obama is pressing for its renewal.