The Honorable John A. Boehner
Speaker of the U.S. House of Representatives
Office of the Speaker
1011 Longworth House Office Building
Washington, DC 20515-3508
Dear Mr. Speaker:
The legislation ignores the marketplace realities of global competition. U.S. oil and gas companies must operate abroad to gain access to oil and gas reserves not available in the U.S. Relying on domestic production alone to compete in both domestic and foreign markets is not a viable strategy. The repeal of Section 199 and change in cost recovery for the drilling costs of exploration and development for domestic oil and gas companies would put these companies at a disadvantage, and not change the tax treatment for their competitors in the U.S. marketplace.
S. 2204 would also raise the tax burdens on three U.S.-owned corporations on their foreign operations with no change in the treatment of foreign-owned corporations. This would decrease the competiveness of American worldwide companies’ vis-à-vis foreign owned corporations hurting American workers. The legislation would reduce the foreign tax credits that companies use to offset taxes paid in foreign markets, resulting in double taxation of U.S. companies. The legislation is discriminatory because it hurts selected U.S.-based companies and helps foreign-owned companies.
Overall, the legislation will increase the cost of producing energy in the U.S. and reduce our energy security.
The oil and gas provisions should be thoughtfully considered only in the context of comprehensive tax reform, evenly applied, rather than as piecemeal, permanent, and punitive revenue raising items for short term tax breaks. The NFTC strongly urges the Senate to vote no on S.2044.
About the NFTC
Advancing Global Commerce for Nearly A Century- The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
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