[Congressional Record Volume 141, Number 141 (Tuesday, September 12, 1995)]
[Extensions of Remarks]
[Pages E1761-E1762]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                  ENVIRONMENTAL TAX REFORM ACT OF 1995

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Tuesday, September 12, 1995
  Mr. STARK. Mr. Speaker, today, I am introducing the first in a series 
of bills to discourage pollution and resource depletion through the 
elimination of corporate energy and resource subsidies.
  The first bill in this series is simple. It repeals 11 incentives in 
the corporate Tax Code to produce various polluting energy supplies and 
consume various nonrenewable minerals. 

[[Page E 1762]]
The revenue raised by repealing these corporate provisions is 
approximately $14.5 billion over 5 years.
  Through powerful lobbying, polluters have carved out special 
treatment in the Tax Code. These tax breaks or loopholes do nothing but 
undermine the public good. Not only is the Government subsidizing 
environmental degradation, but average citizens must make up for the 
lost revenue by paying higher taxes or suffering under the burden of 
increased national debt. These tax loopholes function as a reverse 
Robin Hood, taking from the average worker and giving to the polluting 
businesses.
  Fundamentally, these tax subsidies lock-in old technologies, such as 
coal-fired electricity, which make it harder for new, cleaner, more 
efficient technologies like solar or wind energy to take hold and 
complete. Furthermore, subsidizing the extraction of virgin minerals 
from the earth makes recycling and source reduction less competitive.
  Currently, these polluting tax subsidies cost taxpayers close to $2.2 
billion per year. This figure is expected to total a $14.5 billion 
Treasury loss over the next 5 years. The mining and oil corporations 
are two industries which are rewarded with special tax breaks for 
polluting activities.
  First, the mining industry enjoys tax subsidies for mining toxic 
substances such as lead, mercury, and asbestos. These subsidies can 
exceed the value of the owners' investment in the mine. Furthermore, 
tax subsidies conflict directly with Federal environmental policies. 
The Tax Code subsidizes the mining of lead, asbestos, and mercury, 
while the Government spends millions to eradicate these highly toxic 
substance from our environment.
  The second major industry cradled by tax subsidies is the oil and gas 
industry, which enjoys the most elaborate targeted tax treatment 
available to any industry. For example, investors can write off passive 
losses from oil and gas investments but not from investments in other 
industries. Oil and gas companies are allowed to write off many of 
their capital costs immediately, and many can take deductions for so-
called percentage depletion--which has no connection with actual 
expenses or depletion. The purpose of these tax subsidizes is to 
encourage domestic oil and gas production and consumption.
  Having provided these subsidies, Congress has recognized that it is 
not in the national interest to encourage oil and gas consumption. But 
rather than repealing the oil and gas tax breaks, it has instead 
provided additional, conflicting subsidies for alternative fuels and 
conservation. To make matters even more confusing, one of the largest 
alternative fuel subsidies is for gasohol, which some argue may use 
almost as much fuel to produce as it ostensibly saves. In total, the 
conflicting tax breaks for oil, gas and energy are estimated to cost 
$19 billion over the next 5 years.
  The U.S. Treasury studies have repeatedly found that extractive and 
polluting industries such as coal mining, petroleum, natural gas, and 
hardrock mining already have lower effective rates than other 
industries. In a time when there are no guarantees of Government 
support for the poor, the young, or the disabled, one might ask whether 
there should be guarantees of Government support for businesses, 
particularly those that degrade our natural environment and threaten 
our health. It is time to end these tax breaks.


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