Congress eyes oil and gas tax perks as it hunts for budget cuts
As Republicans push for trillions in tax cuts, oil and gas companies are lobbying to protect long-standing tax breaks and add new ones that could shield them from recently enacted corporate taxes.
Nicholas Kusnetz reports for Inside Climate News.
In short:
- The oil and gas industry has benefited from tax breaks for decades, and now seeks to preserve them as Congress looks for ways to offset $4.5 trillion in planned tax cuts.
- A new analysis finds several oil firms have already paid hundreds of millions under a corporate minimum tax meant to close loopholes, prompting a GOP-led bill to ease that burden.
- Companies like Exxon and Chevron also benefit from a tax rule allowing them to count foreign royalties as U.S. tax credits, potentially saving billions.
Key quote:
“They make huge payments to governments around the world, including to some in some pretty shady places, and what is adding insult to injury is a lot of those payments are used to offset payments they pay here in the U.S.”
— Zorka Milin, policy director at the Financial Accountability & Corporate Transparency Coalition
Why this matters:
Tucked deep within the U.S. tax code are provisions that quietly steer billions of dollars in subsidies and incentives to oil and gas companies, often with little public debate. These rules don’t just reduce what fossil fuel giants pay in domestic taxes; they can actively encourage drilling overseas, where profits may face lower taxes or looser regulations. That dynamic undermines both U.S. climate goals and government revenue, reinforcing a dependence on fossil fuels even as global emissions continue to climb.
The public cost is more than environmental: As corporate tax bills shrink, the pressure grows to cut public services or raise taxes elsewhere. At its core, the issue raises uncomfortable questions about fairness — whether the tax code is serving the public good or protecting powerful interests at public expense.
Related: Opinion: Trump allies aim to take U.S. energy policy back in time
