CO-SPONSORSHIP of the Energy Freedom and Economic Prosperity Act

CO-SPONSORSHIP of the Energy Freedom and Economic Prosperity Act

On November 2, Representative Mike Pompeo (R-Kan.) introduced the Energy Freedom and Economic Prosperity Act (H.R. 3308). The EFEPA would remove distortionary energy tax policy by allowing the energy tax credits set to expire at the end of 2011 to actually expire and by expediting the expiration of all other energy tax credits that extend beyond December 31, 2011, to the end of 2012. By eliminating a broad array of energy tax credits available today, the EFEPA would begin the process getting the government out of the business of picking certain industries as winners and losers in the market. Tax credits targeted for elimination include those to the transportation sector, oil, renewable energy, nuclear, gasification and advanced coal.

The EFEPA would offset the tax increase by requiring the Treasury to lower the corporate tax rate permanently. This would offset the 10-year savings accumulated from permanent elimination of the tax credits. Doing so ensures America's struggling economy does not incur a net tax increase and the lower corporate rate would spur investment, create jobs, and increase gross domestic product and capital stock.

Removing subsidies will allow the most efficient technologies that provide the most value to the consumer to reach the marketplace. Tax credits represent a large portion of total energy subsidies, which include direct expenditures, tax breaks, loan guarantees, mandates and others. The EFEPA would move federal policy the right direction: ending energy subsidies.

Heritage Action supports H.R. 3308 and will include CO-SPONSORSHIP of this legislation in our scorecard.

Related:

Heritage Action's Legislative Scorecard
Heritage: Real Energy Tax Reform Eliminates Subsidies
Ending Energy Subsidies, Jumpstart Tax Reform
Heritage: What's an Oil Subsidy?