Senators back ‘technology-neutral’ energy taxes

The Senate’s top tax lawmaker Wednesday expressed support for moving toward a “technology-neutral” system of tax incentives for energy production.

Sen. Ron WydenRonald (Ron) Lee WydenWyden blasts FEC Republicans for blocking probe into NRA over possible Russia donations Wyden calls for end to political ad targeting on Facebook, Google Ex-CIA chief worries campaigns falling short on cybersecurity MORE (D-Ore.) endorsed the idea as an effort to simplify the United States’ tax code, including different tax breaks for different energy sources, some of which have expired.

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“It’s past time to replace today’s crazy quilt of more than 40 energy tax incentives with a modern, technology-neutral approach,” Wyden said at a hearing on energy tax policies.

“The disparity in how the tax code treats energy sources — and the uncertainty it causes — has to end,” he said.

Wyden, who has backed tax breaks for renewable energy including the wind production tax credit that expired last year, said that fossil fuels generally benefit from incentives that do not expire. But renewables have to deal with “stop-and-go” credits that have to be passed by Congress each year.

Sen. Michael BennetMichael Farrand BennetBiden, Buttigieg bypassing Democratic delegate meeting: report The Hill's Campaign Report: Battle for Senate begins to take shape The Hill's Morning Report — Recession fears climb and markets dive — now what? MORE (D-Colo.) also backed incentives that do not discriminate on technology, though warned that “it’s important for us to get the details right.”

Wyden’s hearing is part of an effort he launched earlier this year when he took control of the Senate Finance Committee to write a “comprehensive” tax reform package. He was chairman of the Energy and Natural Resources Committee before he shifted to the tax panel.

Sen. Mike EnziMichael (Mike) Bradley EnziThe 23 Republicans who opposed Trump-backed budget deal On The Money: Fed poised to give Trump boost with rate cut | Parties unable to reach deal in Trump tax return lawsuit | New York opens investigation into Capital One data breach Outgoing Senate Budget chair unveils plans to replace Budget Committee MORE (R-Wyo.) warned against eliminated tax policies that benefit the oil and natural gas industry, such as the ability to deduct drilling costs.

“Those are comparable, perhaps, to research and development, but I think they’re more comparable to amortization and depreciation,” he said. “So the loss of this deduction for producers would reduce their available capital immensely.”

While not endorsing Wyden’s technology-neutral approach, Sen. Debbie Stabenow (D-Mich.) said it is important to level the playing field between fossil fuels and alternative energy.

“The reality is that we’ve had a permanent tax policy since 1916 in some way incentivizing or supporting oil,” she said, estimating that fossil energy companies have received $166 billion in tax incentives in the last three decades.

“We picked a winner, and they won,” Stabenow said. “So now the question is, can we create more competition for different kinds of energy and create a policy that makes sense for all of them?”