United States President Barack Obama's plan for reforming the country's business tax system hopes to support "clean energy" generation as a way of making jobs, while cutting subsidies for fossil fuels.

On Wednesday, the Treasury Department released the administration's "framework" for business tax reform which outlines long-term measures to improve the country's business tax system.

"In order to make us more competitive and create jobs here at home, we must reform our corporate tax code," said Treasury Secretary Tim Geithner. "The President's framework would boost growth and provide American companies with incentives to invest in the U.S. while simplifying and cutting taxes for our small businesses."

A significant portion of the proposal is devoted to clean energy, for which Mr. Obama wants to "extend, consolidate, and enhance" key tax incentives to encourage investment.

"The President's Framework would make permanent the tax credit for the production of renewable electricity, in order to provide a strong, consistent incentive to encourage investments in renewable energy technologies like wind and solar," the report, jointly released by the White House and the Treasury, read.

The framework also plans to make the permanent production tax credit refundable.

"[T]he structure of renewable production and investment tax credits has required many firms to invest in inefficient tax planning through tax equity structures so that they can benefit even when they do not have tax liability in a given year because of a lack of taxable income," it stated.

On the other hand, the proposed tax framework calls for the elimination of "loopholes and subsidies," particularly preferences for oil and gas, in the current system.

"The framework would repeal tax preferences available for fossil fuels. This includes, for instance, repealing the expensing of intangible drilling costs, a provision that allows oil companies to immediately write-off these costs rather than recovering the cost over time as for most capital investments in other industries," the document read.

"This also includes repealing percentage depletion for oil and natural gas wells, which allows certain oil producers and royalty owners to recover the cost of oil and gas wells based on a percentage of the income they earn from selling oil and gas from the property rather than on the exhaustion of the property. Percentage depletion allows deductions that can exceed the cost of the property."

The American Fuel and Petrochemical Manufacturers, in a statement, called Mr. Obama's plans "discriminatory."

"Eliminating tax deductions that every other American manufacturer receives and supporting tax hikes on energy that Americans use every day in order to subsidize other forms of energy that can't compete on their own in a free market is not the right approach," organization president Charles T. Drevna was quoted in the group's statement as saying. – EcoSeed Staff

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