Repeat after me - we hate big oil, we hate big oil...we hate hydrocarbons...
2009 Budget - A New Era of Responsibility.
The Office of Management and Budget has released the budget for FY 2010 entitled "A New Era of Responsibility: Renewing America’s Promise," which outlines the President tax and spending proposals for the next fiscal year and beyond. A copy is attached, and it can also be found on the OMB website at whitehouse.gov. The budget projects a federal deficit of $1.75 trillion for 2009, which is 12.3 percent of GDP and the highest percentage of GDP since the Second World War. In order to begin reducing the deficit, the budget, while directing substantial funding to stimulus programs and the priority areas of health care, education and energy, and cutting taxes for middle income taxpayers, also contains tax increases on upper income individuals and certain corporate taxpayers and cuts in spending for some areas outside of the President's priorities. The energy proposals tend to direct spending and tax benefits away from oil and gas and towards alternative energy.
Of the tax proposals outlined in the budget, the one of most specific interest to Association members is carried interest: the Administration has picked up the proposal to treat all carried interest as ordinary income. The provision is projected to raise $24 billion over 10 years. This is not a surprise, as President Obama as a Senator expressed support for changing the treatment of carried interest and cosponsored the Baucus-Grassley bill to address the carried interest problem by taxing investment management PTPs as corporations. We continue to see no indication that he has any interest in PTPs beyond that. We are working with the staff of the Congressional tax writing committees to ensure that any carried interest legislation clearly excludes the publicly traded PTP GPs, and are confident that we will be able to do so.
Other proposals that may impact a number of Association members include:
A new excise tax on offshore oil and gas production in the Gulf of Mexico, to begin in 2011
Repeal the enhanced oil recovery credit
Repeal the marginal well tax credit
Repeal expensing of intangible drilling costs
Repeal deduction for tertiary injectants
Repeal passive loss exception for working interests in oil and natural gas properties
Repeal manufacturing tax deduction for oil and natural gas companies
Increase geological and geophysical amortization period for independent producers to seven years
Repeal percentage depletion for oil and natural gas
Repeal ultra-deepwater oil and gas research and development program
Charging user fees to oil and gas producers for processing drilling permits on federal lands
"Increasing the return from oil and gas production on Federal lands through administrative actions, such as reforming royalties and adjusting rates."
Implement a cap and trade program to reduce carbon emissions.
Funding to develop low-carbon coal technologies
Funding for biofuels and other clean energy technologies |
