Pension funds and other tax-exempt institutions would be required to pay taxes on gains from their investments in oil and gas commodities under legislation introduced by Sen. Ron Wyden, D-Ore.
The bill would also require speculators such as hedge funds to pay ordinary taxes, rather than the current lower rate applicable to capital gains, on investments in energy commodities, according to a news release issued by Mr. Wyden.
The legislation, the Stop Tax Breaks for Oil Profiteering Act of 2009, “would end the free ride that institutional investors get on profits made from the high prices of oil and natural gas — prices that have been driven higher by the high volume of institutional investment,” said a summary of the legislation issued by Mr. Wyden.
“Without tax subsidies, big investors will invest less in oil and gas markets, which means that oil and natural gas prices can be expected to fall, saving consumers at the pump,” the summary said.
The legislation has been referred to the Senate Finance Committee.