(The Center Square) – East Coast gas shortages helped rally opposition from Congress to the parts of President Joe Biden’s infrastructure plan that would force oil and gas companies to pay more taxes.
House Republicans sent a letter to House Speaker Nancy Pelosi, D-Calif., And House Majority Leader Steny Hoyer, D-Md., Urging Democrats to endorse Biden’s plan to “remove tax preferences for.” fossil fuels ”.
The letter, signed by 55 Republicans, came after a cyberattack by the Colonial Pipeline shut down a major pipeline on the east coast, causing fear-related gasoline shortages. The attack also raised questions about the country’s energy infrastructure and vulnerability to attack.
“An infrastructure package should not contain penal tax rules that cripple a vital industry, lead to mass layoffs, skyrocketing energy costs for working families, higher prices at the pump, and give China and Russia the upper hand in a highly competitive global market read the letter posted on Thursday was sent. “Policymakers shouldn’t pick winners and losers, and if the oil and gas industry is really the” loser “radical left progressives want, the market should decide.”
The letter marks the recent backlash against tax law changes as Republicans use pipeline safety concerns this week to make their point.
“It is one thing for politics to speed up investment or the production of certain products, but it is quite another thing to write laws that would penalize a certain industry, especially one that is so for our economic growth and national security is fundamental, “reads the letter. “Using an ‘infrastructure’ package to weaken our energy infrastructure is a serious mistake that will harm families, farmers and small businesses still recovering from the pandemic.”
The oil and gas industry is heavily dependent on long-term tax breaks from the federal government. Part of the debate on this issue revolves around whether federal aid to oil and gas companies should be characterized as subsidies or tax deductions. Many on the left say the tax breaks are generous subsidies, especially given corporate profits and environmental concerns.
Many Republicans argue that these are not subsidies, but rather necessary deductions that are normal for businesses.
“The fossil fuel industry employs millions of Americans, mostly in rural communities, while contributing more tax revenue than any other industry in the nation,” said Daniel Turner, founder of Power the Future, energy worker advocacy group. “Tax breaks and tax deductions for research, development and capital improvements are not subsidies. The Biden administration purposely confuses the language because they know the truth will not advance their agenda. “
This week’s cyber attack helped garner support for a common topic of conversation to keep the energy industry safe from Biden’s infrastructure plan, which is raising taxes and favoring the renewable energy industry.
“The colonial pipeline crisis shows that we need more American energy to boost our economy, not less,” said Kevin McCarthy, chairman of the R-Calif minority House of Representatives.
Critics argue that removing subsidies could cost millions of jobs and weaken the country’s energy infrastructure. They also indicate the risk of bottlenecks.
“The oil and gas sector supports 11 million high-paying manufacturing jobs,” said Americans for Tax Reform. “President Biden speaks repeatedly about creating millions of high-paying manufacturing jobs. However, by driving tax hikes for oil and gas taxpayers, Biden is aiming for 11 million existing high-paying manufacturing jobs. Biden should focus on measures that create more jobs, rather than proposals that threaten existing jobs. “
Biden met with six Republican senators on Thursday for non-partisan talks on infrastructure, but no agreement was reached.
“It’s been great to be back with so many colleagues I’ve worked with in the Senate and I’m very optimistic that we can reach a sensible deal,” said Biden after the meeting. “We didn’t compromise on anything. What we did was I set out what we should do and how it should be paid, and my Senate colleagues came back to me and said they would come back with a counter offer of what they are prepared to do and how to fund it, and then we’ll talk again next week. “
Biden’s infrastructure plan is estimated to cost an estimated $ 2 trillion as corporate taxes rise and auditing becomes more aggressive to bear the cost. Critics argue that Biden’s proposed taxes would be passed on to consumers in the form of higher energy prices.
“Raising taxes on fossil fuels increases the cost of everything,” Turner said. “It is a fallacy to believe that companies will pay more taxes. You will only pass these additional costs on to consumers. We are already seeing skyrocketing prices for wood costs. Food prices have risen dramatically. And all because energy prices have risen. Punishing the energy industry does nothing for the environment, does nothing to combat climate change, only helps get cheap political points while making the American people more painful at a time when they have been inflicted enough pain by the government inflicts. “