Reconciliation Bill’s $20B Tax Hike on Fossil Fuels

Energy policy is a centerpiece of the federal budget reconciliation bill recently approved by the U.S. Senate on a party-line vote. (See related stories in this Leadership Briefing.)

President Joe Biden has said the legislation makes “the largest investment ever in combatting the existential crisis of climate change” and “lowers families’ energy costs by hundreds of dollars each year.”

Free-market organizations tell a different story. In its list of tax increases contained in the reconciliation plan, Americans for Tax Reform says the bill imposes a $6.5 billion tax on natural gas; a $12 billion tax on crude oil; and a $1.2 billion tax on coal.

The OMA and nearly 60 other organizations that oppose the new taxes sent this letter to Speaker Pelosi and Minority Leader Kevin McCarthy itemizing concerns with the Inflation Reduction Act. 8/8/2022