Joe Biden tax plan targets fossil fuel subsidies worth $35 billion

President Joe Biden’s plan to eliminate subsidies claimed by oil and gas companies and raise levies on corporate polluters would increase government receipts by $35 billion over the coming decade. The benefits of these subsidies are currently concentrated “within a handful of large firms,” the Treasury said in the Made In America Tax Plan released Wednesday. The report expands on tax proposals in Biden's $2.25 trillion economic package unveiled last week.

The plan is likely to meet stiff resistance from the oil and gas industry and its supporters on Capitol Hill. Biden already surprised many executives in the first few months of his presidency by cancelling the Keystone XL crude pipeline and restricting drilling on federal land.

“The main impact would be on oil and gas company profits,” the Treasury said in the report. “Research suggests little impact on gasoline or energy prices for US consumers and little impact on our energy security.” Oil and gas producers benefit from elements of the tax code that allow them to deduct drilling costs early in a project's life cycle and are able to carry forward losses for several years.