Charlie Melancon: Saving oil & gas industry billions

ST. MARTINVILLE – The billions of dollars in taxes on U.S. the domestic oil industry are “off the table,” said U.S. Rep Charlie Melancon, traveling through Louisiana’s Third Congressional District Friday to mend fences after some tough votes in Washington.

Melancon, D-Napoleonville, said he supported the 2010 House budget resolution after he and other Blue Dogs, or conservative Democrats, were successful in removing billions in new taxes on the oil and gas industry along with a provision to repeal billions more in energy industry tax incentives.

Melancon, who is on the House Budget Committee, said he framed his argument with simple economics.

“I talked to the White House and to the chairman of the Budget Committee and said, look, the price (of oil) is down. They’re parking jack-ups and offshore supply boats and helicopters. If you put a tax on them, that’s less incentive for them to get back up. So do you want to be energy independent or you want to pick up three billion dollars a year? You’ll get more than that off the revenue if they’re back out there producing,” Melancon said.

“So they pulled it out. That doesn’t mean that somebody else won’t try in the Ways and means Committee to try and put it back on, but right now it’s off the table. The budget’s been done.”

The Obama administration’s $3.5 trillion budget had included proposals to repeal the manufacturing tax deduction for oil and gas companies and eliminated the percentage depletion allowance, de facto tax increases calculated to raise federal revenues by over $31 billion over the next decade.

Melancon told an audience in New Iberia Friday his vote on the federal stimulus package was a tougher call, with his constituents dived about 50/50 over the issue. He said he went for it because federal stimulus money is needed to repair levees and other infrastructure destroyed by Hurricanes Katrina and Rita.

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