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Big Oil’s $121 billion bailout

by Lukas Ross, climate and energy program manager

Getting to Know the Global Intangible Low-Tax Income Regime

A GILTI Conscience

  • Chevron, the second largest oil company in the US, reported lobbying both the House and the Senate on such issues as “Foreign Oil & Gas Extractive Income” and “Global Intangible Low-Tax Income” — in other words, on GILTI and on the specific category of income exempt from GILTI.
  • Conoco, the largest independent oil driller in the US with global operations as far flung as Malaysia and Libya, was even more explicit. The company reported lobbying of both the House and the Senate on “Tax Cuts and Jobs Act International Provisions: global intangible low-taxed income and foreign tax credit regime” and “Protection of 21% Corporate Tax Rate in the Tax Cuts and Jobs Act.”

Subpart F

Time to End Big Oil

  • The End Polluter Welfare Act from Senator Sanders and Representative Omar contains the widest list of oil, gas and coal subsidies. This includes century old tax code subsidies like intangible drilling costs and the depletion allowance as well as newer gimmicks like royalty relief that allow oil and gas to be drilled for free from the Gulf of Mexico. It would also eliminate the GILTI exemption for oil extraction.
  • The No Tax Breaks for Outsourcing Act from Senator Whitehouse and Representative Doggett would reverse the damage of the GOP tax cut by ensuring that all foreign profits are taxed at at least the same rate as domestic profits. It would also eliminate the GILTI exemption for income from extraction and restore refining income to its treatment under Subpart F.
  • The Clean Energy for America Act from Senator Wyden was passed by the Finance Committee in May. It would overhaul the current system of renewable energy tax credits and create a technology neutral framework under which all zero-emissions sources could qualify for incentives. Although it includes potential lifelines for fossil fuels like carbon capture and hydrogen, it would also eliminate a suite of fossil fuel tax subsidies. In addition, it would end the GILTI exemption for extraction and return refining to Subpart F.

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