The impact of the biggest overhaul of the US tax code in three decades will spread far and wide starting next year, as the biggest first-year benefits go to industries such as oil and gas that currently pay high effective tax rates.
Oil-and-gas companies will be big winners because they pay the second-highest effective tax rate of any sector, at 37 percent, according to Bloomberg Intelligence.
Immediate benefits would be the cut in the corporate rate to 21 percent from 35 percent, fully allowable deductions for capital expenses and lower levies on repatriating overseas profits.
Analysts point out that a large number of oil explorers and equipment providers won’t benefit because their operations are unprofitable.
But the industry will certainly see benefits – after some 40 years of intense lobbying -- now that Republicans have opened a portion of Alaska’s Arctic National Wildlife Refuge to oil and gas drilling, which could generate $1 billion in revenue over a decade.
Meanwhile, the renewable energy industry avoided taking a big hit by lobbying Republicans to keep a $7,500 electric-vehicle subsidy and a tax credit for wind-power production.
But there is concern that the bill’s changes to how tax credits work may disrupt financing of wind and solar projects.
