• Energy Tax Facts
  • 12 Aug 21

PennLive: Removing tax provisions for energy hurts American consumers in more ways than one

By Jeff Kupfer, a former acting deputy secretary of energy in the Bush administration and an adjunct professor of policy in Carnegie Mellon University’s Heinz College

It’s no secret that President Joe Biden is planning to use every tool at his disposal to wage an aggressive fight against climate change. Starting on his first day in office, he has directed a series of actions across the government to study and implement many new policies. And his latest? The budget.

In May, the administration released its Fiscal Year 2022 budget, which not only proposes to expand investments in clean energy, but also looks to eliminate certain tax provisions for oil and natural gas companies.

Targeting these tax provisions is not new – as many policymakers over the years have considered whether it makes sense modify or eliminate them. But just like in the past – and especially in the absence of a comprehensive tax overhaul – this approach is riddled with flaws.

First, it ignores a basic market reality – which needs to look at supply and demand. The stated rationale for the administration’s move is that energy tax provisions “distorts markets by encouraging more investment in the fossil fuel sector. . . ” But is having more domestic supply really such a problem? …

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