Energy Tax Policy: Issues in the 114th Congress [September 4, 2015]   [open pdf - 868KB]

"A number of energy tax provisions expired at the end of 2014. Expired provisions include those that support renewable electricity (the production tax credit (PTC)), provisions that support energy efficiency in both residential and commercial buildings, and tax credits for certain biofuels and other alternative fuels. Like the 113th Congress, the 114th Congress may choose to address expired energy tax provisions. The Tax Increase Prevention Act (P.L. 113-295), enacted late in the 113th Congress, temporarily extended, through 2014, most expired energy tax provisions. The Tax Relief Extension Act of 2015 (S. 1946) proposes extending expired energy tax provisions for two years, through 2016. […] Energy tax policy involves the use of one of the government's main fiscal instruments, taxes (both as an incentive and as a disincentive) to alter the allocation or configuration of energy resources and their use. In theory, energy taxes and subsidies, like tax policy instruments in general, are intended either to correct a problem or distortion in the energy markets or to achieve some economic (efficiency, equity, or even macroeconomic) objective. The economic rationale for government intervention in energy markets is commonly based on the government's perceived ability to correct for market failures. […] As a result, enacted tax policy embodies compromises between economic and political goals, which could either mitigate or compound existing distortions."

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CRS Report for Congress, R43206
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