# People Over Petroleum Act: Plain Language Summary

This bill is designed to eliminate various tax breaks that the federal government currently gives to oil and gas companies. Right now, oil companies get special tax deductions and credits that other industries don't receive—essentially allowing them to pay less in taxes. This bill would remove most of those special advantages, starting in 2023.

The main tax breaks being eliminated include deductions for drilling costs, a special accounting method that lets oil companies reduce their taxable income, credits for producing oil from older wells, and deductions for chemicals used in oil extraction. The bill also prevents oil companies from using a particular accounting technique (called LIFO) that allows them to minimize their reported profits. Additionally, it closes a loophole that lets oil and gas investors deduct losses from their other income, and it prevents oil and gas business owners from claiming a special tax deduction for small business income that other industries can use.

The bill also addresses foreign taxes paid by major oil companies. Currently, oil companies can claim credits for taxes paid to foreign governments, sometimes paying more to those governments than they would owe in the U.S. and still getting a tax benefit. This bill would limit that advantage by ensuring companies don't get credit for payments that exceed what they'd normally owe.

The stated purpose is to redirect the money saved from eliminating these oil industry tax breaks toward providing rebates to individual Americans for gas prices. However, the bill text provided doesn't include the specific details about how those rebates would work or who would receive them.

People Over Petroleum Act

Casten, Sean

People Over Petroleum Act This bill limits or repeals certain fossil fuel oil and gas subsidies for oil companies and establishes a gas prices rebate for individual taxpayers. Among other elements, the bill <ul> <li>repeals the tax credits for producing oil and gas from marginal wells and for enhanced oil recovery;</li> <li>repeals various tax deductions, including the deduction for the intangible drilling and development costs of oil and gas wells;</li> <li>repeals the passive loss exception for working interests in oil and gas property; </li> <li>denies the tax deduction for income attributable to domestic production activities for oil and gas activities; </li> <li>prohibits the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies;</li> <li>limits the foreign tax credit for dual capacity taxpayers (i.e., taxpayers who are subject to a levy of a foreign country or U.S. possession and receive specific economic benefits from such country or possession); and </li> <li>expands the definition of crude oil for purposes of the excise tax on petroleum and petroleum products to include any oil derived from a bitumen or bituminous mixture (tar sands), and any oil derived from kerogen-bearing sources (oil shale).</li> </ul> The bill also allows individual taxpayers a 2022 gas prices rebate for the first taxable year beginning in 2022. The bill defines 2022 gas prices rebate amount as the sum of $500 ($1,000 for joint returns), plus $500 times the number of taxpayer dependents who had attained the age of 16 as of the end of the taxable year.