Passive Loss Background Taxpayers with substantial sources of income from salaries or investments can eliminate or sharply reduce their taxable income by investing in "passive loss" tax shelters. The 1986 Tax Reform Act eliminated these tax shelters for virtually all other investments except those directed in the oil and gas industry.
Green Scissors Proposal Eliminate the "passive loss" tax shelter for investors in oil and gas. This action would save taxpayers $125 million over five years, according to the White House Office of Management and Budget.
Project Hurts Taxpayers This tax break helps prop up the domestic oil industry with taxpayer dollars. Money that should be rightfully coming back to taxpayers and the Treasury should not be going to support this multi-billion dollar industry's profit margin. Furthermore, this tax shelter has not helped to prevent a decline in domestic production - its original intention. Instead, this tax break needlessly costs taxpayers millions of dollars every year.
Project Hurts EnvironmentOil and gas are polluting, non-renewable resources. This oil and gas tax shelter attracts investors that might otherwise invest in cleaner, growing industries. In addition, the tax break encourages the overproduction of oil and gas, which causes environmental damage to air, land, water, and soil quality.
$125 million