Today, U.S. Senators Jim DeMint (R-South Carolina) and Mike Lee (R-Utah) introduced the Energy Freedom & Economic Prosperity Act (EFEPA) to repeal all energy specific tax credits. The legislation is revenue neutral as it also requires a corresponding reduction in the corporate tax rate. U.S. Congressman Mike Pompeo (R-Kansas) has previously introduced companion legislation in the U.S. House of Representatives.
Senator DeMint said, "Our tax code is riddled with loopholes for special interests and it's time to end this corporate welfare that is hurting our economy. When Washington picks winners and losers in the energy market, those with the highest paid lobbyists win while the small businesses and taxpayers lose. We shouldn't favor ethanol over hydrogen, nuclear over natural gas, or oil over renewables. The free market economy works when everyone competes on a level playing field and works to provide Americans with the best, lowest-cost products. The ultimate solution is to create a true flat tax that ends all corporate welfare, and this is a significant first step."
Senator Lee said, "The federal government has for decades been making the mistake of picking winners and losers in the energy industry. Not only does this go against the very nature of the American economy, but it is accomplished by adding layers of costly complexity to our tax code. The waste and futility of our current energy policies are demonstrated time and time again, from the backfiring of ethanol mandates to the bankruptcies of favored companies like Solyndra to the utterly inexplicable rejection of the Keystone XL pipeline. In this era of rapidly growing energy demands, we must be willing to stop government interference in the energy market and the obstruction of domestic energy production. There is no more efficient way to power the nation."
Congressman Pompeo said, "I applaud Senators DeMint and Lee for leading the charge in the Senate against President Obama's failed policy of energy tax subsidies. For far too long, Washington has engaged in crony capitalism by using the tax code to pick winners and losers in the marketplace. This is all too evident in our current energy policy. My bill, The Energy Freedom and Economic Prosperity Act (HR 3308) is a comprehensive and thorough effort to stop this "Washington knows best" approach. I am thrilled that Senators DeMint and Lee have taken Senate action and joined with me to end taxpayer handouts to politically favored industries. Neither our nation, nor our free market system, can afford them."
EFEPA is supported by numerous taxpayer-watchdog groups including Americans for Prosperity, Americans for Tax Reform, Club for Growth, Council for Citizens Against Government Waste, Freedom Action, Heritage Action, Less Government, National Taxpayers Union, and Taxpayers for Common Sense.
Repeals all energy tax credits.
Treats all energy sources fairly by eliminating all tax credits for renewable and conventional energy sources alike. The EFEPA does not pick winners and losers.
Requires a corresponding reduction in the corporate tax rate which keeps the legislation revenue neutral and does not take any more money out of the private economy for politicians to spend.
Assuming these tax credits are continuously extended this legislation would end nearly $90 billion in energy subsidies over the next 10 years, including credits that expired at the end of 2011.
Subsidies that will be eliminated under EFEPA include:
Enhanced oil recovery credit, credit for producing oil and gas from marginal wells, advanced nuclear power generation credit, plug-in electric and fuel cell vehicles, alternative fuel and alternative fuel mixtures, cellulosic biofuel producer credit, alternative fuel infrastructure, production tax credit for electricity produced from renewable sources, investment tax credit for equipment (solar, fuel cells, geothermal or other renewable sources of energy), clean coal investment credits.