Senate Republicans have added a provision to their draft of the budget reconciliation package that would exempt domestic oil and gas companies from paying corporate taxes, saving them more than $1 billion over the next decade.
On Wednesday, David Dayen reported in The American Prospect that the Senate Finance Committee's version of the bill, released Monday, "shields domestic onshore oil and gas drillers from the Inflation Reduction Act's corporate alternative minimum tax," or CAMT.
That provision was secured by Sen. James Lankford (R-Okla.), and the benefits would largely flow to companies based in his home state.
As Dayen wrote, the CAMT is "a fairly clean tax provision as these things go." It currently requires companies that bring in more than $1 billion to pay 15% of the profits they report to shareholders.
However, the Senate Republican draft would modify that calculation to account for "intangible drilling and development costs," which would allow companies to declare lower profits and put many of them below the threshold required to pay the 15% tax.
According to Bloomberg, companies including ConocoPhillips, Ovintiv, and Civitas Resources lobbied in favor of the bill. Lankford, meanwhile, received more than $546,000 in campaign contributions from the oil and gas industry—his top source of industry donations—between 2019 and 2024 according to OpenSecrets.
Big Oil will be rewarded handsomely for its efforts. The provision in the Senate GOP bill is virtually identical to another bill proposed by Lankford, which the nonpartisan Tax Foundation found would hand $1.1 billion in government revenue to the fossil fuel industry over the next 10 years.
"This disastrous piece of legislation includes giveaway after giveaway for the fossil fuel industry, while cutting crucial clean energy programs that help consumers save money on their electric bills," said Alan Zibel, an oil and gas researcher with the consumer rights group Public Citizen.
In addition to this tax loophole, the Senate GOP's bill includes billions of dollars in upfront subsidies to Big Oil and cuts royalties paid by oil and gas companies for drilling on public lands. At the same time, the bill guts subsidies for wind and solar energy, including a tax credit that saved money for consumers who made their homes more energy efficient.
Through its combination of tax breaks and cuts to safety net programs like Medicaid and food stamps, the so-called "Big Beautiful Bill" constitutes a massive transfer of wealth from the poor to the rich. According to an analysis by the Congressional Budget Office last week, it would result in the richest 10% of households bringing in an extra $12,000 a year while the poorest 10% would lose nearly $1,600.
"You have got to be kidding me," tweeted the account for Americans for Tax Fairness in response to the Senate GOP's draft. "Not only does the bill gut Medicaid and SNAP to fund tax breaks for billionaires. Now it gives Big Oil MORE money while they price-gouge us."
