Senator Baucus: Tax Breaks For Big Oil Need To Go

Montana's Senior U.S. Senator Stands Up For Consumers

May 7, 2008 -- (Washington, D.C.) – At a press conference on Capitol Hill today Montana’s senior U.S. Senator Max Baucus announced his plan to crack down on big oil by getting rid of current tax breaks for the country’s major oil companies.

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Baucus, chairman of the powerful Senate Finance Committee – the panel with jurisdiction over taxes and revenue – proposed repealing the Section 199 manufacturing deduction for the major integrated oil companies, while tightening the rules that govern how much U.S. taxes are due on income earned overseas by oil and gas companies.

“Consumers are being hit hard as energy soar through the roof while the big oil companies continue to get billions and billions in tax breaks from the federal government and that’s not right,” Baucus said. “I’m here to stand up for consumers and to crack down on those who are already living high on the hog.”

Baucus’ Measure To Crack Down On Big Oil Would:

• Do away with the section 199 manufacturing deduction for major oil companies.

• Tighten the rules that determine how much tax is paid by U.S. companies on overseas income. To prevent double taxation of foreign-source income, current law allows a credit against U.S. tax liability for foreign income taxes paid. In an effort to improve tax compliance, this provision tightens the foreign tax credit law.

“Bottom line, this is the right thing to do for consumers in Montana and across the country,”Baucus said. “I’m committed to doing all I can to do what’s right for Montanans and this measure is a step in the right direction.”

Baucus said that this legislation is expected to be considered by the full Senate later this month.

Source: Senator Max Baucus