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Tax Reform Proposal Bad For Energy Industry

Montana Representative Duane Ankney | Sidney Herald

Dec 10, 2013

It started out as an ambitious plan. Sen. Baucus’s “clean slate” approach to federal tax reform had initial support from interests on both sides of the aisle. It was supposed to overhaul our bloated, incomprehensible tax code.

 It was supposed to clean up the hodgepodge of tax credits, lower tax rates, and make the entire structure more equitable for everyone.

But now it’s shaping up to be a major disappointment. And worse, the final tax plan could have terrible consequences for Montana’s economy.

Bits and pieces of the reform have broad support. Like dropping the corporate tax rate, which is the highest in the world, down from 35 percent to a more internationally competitive level.

But the latest “discussion draft” being circulated in Washington has resulted in more contention than consensus. Of particular concern to Montana are a slew of proposals that single out the oil and gas industry for some pretty rough tax treatment.

The energy industry is already one of the most heavily taxed in the nation. They’d be hit even harder if the proposals in the Baucus draft were adopted. The result would be the end of tax policies designed to encourage investment in energy exploration and job creation.

With Montana on the cutting edge of oil and gas exploration, the tax changes in the Baucus discussion draft would have a deeper impact here than in most other state. Job growth in Montana would be stunted; growth in tax revenue that has kept Montana’s state and local budgets in the black would drop off; and our overall economic growth would be curtailed.

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