Ohio’s Sen. Brown floats oil tax-break repeal plan

Sen. Sherrod Brown (D-Ohio), who is likely to face a tough reelection battle next year, floated plans Monday to kill billions of dollars' worth of oil industry tax breaks.

Democratic plans to end tax incentives and royalty waivers are piling up on Capitol Hill as the party tries to avoid political fallout from high gas prices and counter GOP calls to greatly widen offshore drilling.

Senate Democratic leaders plan to launch a floor fight over industry tax breaks as soon as this week.

Brown announced his plan Monday at a gas station in Cleveland. It would end $4 billion annually in tax breaks, subsidies and royalty waivers for the five largest oil companies, his office said.

“It's bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump because the price of crude oil rises due to price fixing by OPEC,” Brown said in a statement.

“They shouldn't need to subsidize the oil industry through the tax code as well. Big Oil is reaping big profits while working- and middle-class Ohioans struggle to make ends meet,” he said.

The bill targets the companies’ ability to claim a lucrative deduction based on manufacturing and production income and quickly write-off certain drilling costs, among other provisions.

But the oil industry is striking back at efforts to raise taxes on producers. Industry officials say that stripping tax breaks would slow domestic energy projects.

“What you are saying is we are going to discourage the very companies we need to rely on to develop America’s oil and natural gas resources,” American Petroleum Institute President Jack Gerard said in a weekend broadcast of the C-SPAN program “Newsmakers.”