"Hatch To Oppose His Own Tax Credit Idea If It’s Paid For By Cutting Big Oil Subsidies"
Last week, Sen. Orrin Hatch (R-UT) — like Gov. Mitch Daniels (R-IN) — conceded that taxes will have to increase somewhere in order to get the deficit under control. However, Hatch quickly ruled out increasing revenues by allowing the Bush tax cuts for the rich to expire or by removing subsidies for Big Oil companies.
In fact, Hatch is so adamant about protecting taxpayer subsidies to hugely profitable oil companies, that he’s ready to oppose President Obama’s proposal to make the Research and Development tax credit permanent, as he made clear on the Senate floor yesterday:
This is a bipartisan provision, the Research and Development tax credit and making it permanent. It has wide and deep support on both sides of the aisle here and in the House…We simply can not afford to lose our lead in research by keeping the United States as the premier location in the world to perform research and development…Now, my understanding is that some might go along with this but they want to increase taxes on oil and gas, and they also want to do some other very obnoxious things that would be — that would be difficult to, for, a bipartisan support.
Hatch should know a thing or two about the proposal to make the R&D credit permanent. After all, it’s his idea. He’s been proposing it for years. He introduced a bill in this Congress to do it. In June, he wrote in the Salt Lake Tribune that “the credit provides a proven and effective incentive for businesses to invest in the R&D that leads to long-term growth and new jobs.”
Meanwhile, oil and gas subsidies provide little bang-for-the-buck to American taxpayers. Not only is the oil industry highly mature and profitable — rendering subsidies unnecessary in any case — but removing them will have minimal impact on oil production. The Office of Economic Policy at the Department of Treasury has estimated that removing subsidies for the oil industry would affect domestic production by less than one-half of one percent.
Going to bat for giant corporations and the goodies provided them by the tax code is nothing new for Hatch. After all, he told us that closing corporate tax loopholes is a “stupid, dumb-ass” idea. But it seems that Hatch is so dead-set against removing corporate subsidies that he is willing to forego a useful tax credit that he himself has been championing for a long time.