Biden’s Green Budget Threatens Americans’ Access to Affordable Energy: Senate Republicans

Senator John Barrasso, a Republican from Wyoming, wrote a letter to Janet Yellen. His colleagues and Sen. John Barrasso (R-Wyo.) denounced what they called the Biden administration’s most recent attempt at using the tax code to attack American energy producers.

The March 16th letter responds to President Joe Biden’s request for fiscal year 2024. It focuses on the targeted tax increases of $100 billion on energy (coal, gas, and oil extractive).

Senators pointed out the many ways that these taxes could destroy jobs, increase energy costs for American households, and give American rivals like Russia an advantage on international energy markets.

In a letter, lawmakers voiced grave concern that the administration’s hostility to American energy production was affecting working families and small businesses with high energy costs.

The Treasury Department provides a general explanation of its 2024 revenue proposals. These include $4.7 trillion in new taxes, plus more than $100 billion in tax increases on fossil fuels.

The authors claim that the proposals do not reflect the policy neutrality of the fossil fuel industry and the high tax rates they have already paid.

“Unbelievably, the administration would willingly suppress domestic energy production knowing it means fewer jobs and higher prices for the American people.

“These crushing tax proposals—paired with the administration’s heavy-handed regulations and mandates—would threaten American families’ access to affordable and reliable energy, while giving our adversaries the upper hand in the global energy markets,” the senators wrote.

“America is very fortunate to have abundant resources in energy. The nation should be focusing on American energy and innovation, not on losing one of its greatest economic and geopolitical benefits.”

The letter also points out that many of the proposed tax hikes would repeal cost recovery provisions and deny necessary deductions for energy producers.

Examples include the proposed repeal of expensing for Intangible Drilling Costs and the elimination of Percentage Depletion. Critics say these provisions are essential for independent and family-owned production companies, as well as farmers and ranchers who rely on small royalty payments.

Yellen made headlines just days before the letter was sent when she said that higher corporate taxes are needed for investing in the economy.

The treasury secretary’s comments came the day after Biden unveiled the fiscal year 2024 budget on March 9.

The budget proposes a 28 percent corporate tax rate, up from the current 21 percent. The administration estimates that it would generate $1.32 trillion in revenues.

If enacted, the United States would have one of the highest corporate tax rates among advanced economies, only behind Japan (30.62 percent), Australia (30 percent), and Germany (30 percent). It would also be higher than China’s 25 percent level.

The Department of Treasury declined to comment on the letter.