Administration Would Veto Energy Tax Increase

By February 27, 2008Energy

From the Statement of Administration Policy on H.R. 5351, the Renewable Energy and Energy Conservation Tax Act.

[The] bill would use the tax code to target tax increases on a specific industry in a way that will lead to higher energy costs to U.S. consumers and businesses. If this legislation is presented to the President in its current form, his senior advisors would recommend that he veto the bill.

Specifically, the Administration strongly opposes the bill’s repeal of the manufacturing deduction for a segment of a single industry. This targeted tax increase would reduce the Nation’s energy security rather than improve it. Industries should be taxed on a level playing field, and that field should be leveled by lowering rates, not by raising them; such increases would create an even greater disadvantage with respect to foreign competitors.

Changes to tax rules on foreign operations would also damage the ability of U.S. companies to compete on major energy projects while possiblity violating international trade rules, the Administration says.

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