Fossil Fuel Subsidies Targeted in Budget
The cuts to fossil fuel preferences is a standard request that the President has made throughout his term. It is typically rejected.
But the budget descriptions do outline the large tax advantages that oil, natural gas and coal companies enjoy. Proponents argue that the fuel subsidies keep vital supplies available and that they lower costs for consumers. Opponents claim these subsides instead enrich the profits of the companies and give fossil fuel producers competitive advantages over renewable and clean sources of energy.
One of the largest cuts would be the repeal of the depletion allowance. But also the deduction for intangible drilling costs and the manufacturing deduction would also be deleted. Each of these three fossil fuel subsidies cuts would reduce the Federal deficit by over $1 billion each.
Other cuts would include the elimination of Federal research on certain ultradeep drilling techniques and a tax allowance for marginal wells.
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