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• Energy Tax Policy: Issues in the 112th Congress [April 14, 2011]

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  "As in most Congresses, energy tax policy is expected to be actively debated in the 112th Congress. At the beginning of the 112th Congress, the debate may center on the President's FY2012 Budget. This budget proposes a number of changes in energy tax policy with the intent of correcting perceived distortions in the market and encouraging conservation and the use of renewable energy. Specifically, the proposal seeks to eliminate a number of existing tax incentives for fossil fuels, while expanding select incentives for commercial building energy efficiency and promoting manufacturing of advanced energy technologies. Later in the first session of the 112th Congress, the debate may shift to the evaluation of a number of temporary energy tax provisions scheduled to expire at the end of 2011. Many of the provisions scheduled to expire were granted a temporary extension as part of the Tax Relief, Unemployment Reauthorization, and Job Creation Act (P.L. 111-312), enacted in December 2010. 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. In practice, however, energy tax policy in the United States is made in a political setting, determined by fiscal dictates and the views and interests of the key players in this setting, including policymakers, special interest groups, and academic scholars. As a result, enacted tax policy embodies compromises between economic and political goals, which could either mitigate or compound existing distortions."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.; Crandall-Hollick, Margot L.

  2011-04-14
• Energy Tax Policy: Issues in the 111th Congress [June 16, 2010]

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  "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. In practice, however, energy tax policy in the United States is made in a political setting, being determined by the views and interests of the key players in this setting: politicians, special interest groups, bureaucrats, academic scholars, and fiscal dictates. As a result, enacted tax policy embodies compromises between economic and political goals, which could either mitigate or compound existing distortions. The economic rationale for government intervention in energy markets is commonly based on the government's perceived ability to correct for market failures. Market failures, such as externalities, principal-agent problems, and informational asymmetries, result in an economically inefficient allocation of resources--in which society does not maximize well-being. To correct for these market failures governments can utilize several policy options, including taxes and regulation, in an effort to achieve policy goals. Current energy policy reflects efforts to achieve both current and past policy objectives. Recent legislative efforts have primarily focused on renewable energy production and conservation to address environmental concerns. In contrast, past efforts attempted to reduce reliance on foreign energy sources through increased domestic production of fossil fuels. Recently enacted legislation focusing on encouraging renewable energy production and conservation reduces reliance on imported, foreign oil, while also addressing environmental concerns by reducing the use of fossil fuels. Favorable tax preferences given to domestic fossil fuel energy sources also promote domestic energy production, reducing the demand for imported oil."

  Library of Congress. Congressional Research Service

  Marples, Donald; Sherlock, Molly F.

  2010-06-16
• U.S. Oil Refining Industry: Background in Changing Markets and Fuel Policies [November 22, 2010]

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  "A decade ago, 158 refineries operated in the United States and its territories and sporadic refinery outages led many policy makers to advocate new refinery construction. Fears that crude oil production was in decline also led to policies promoting alternative fuels and increased vehicle fuel efficiency. Since the summer 2008 peak in crude oil prices, however, the U.S. demand for refined petroleum products has declined, and the outlook for the petroleum refining industry in the United States has changed. In response to weak demand for gasoline and other refined products, refinery operators have begun cutting back capacity, idling, and, in a few cases, permanently closing their refineries. By current count, 124 refineries now produce fuel in addition to 13 refineries that produce lubricating oils and asphalt. Even as the number of refineries has decreased, operable refining capacity has actually increased over the past decade, from 16.5 million barrels/day to over 18 million barrels/day. Cyclical economic factors aside, U.S. refiners now face the potential of long-term decreased demand for their products. This is the result of legislative and regulatory efforts that were originally intended, in part, to accommodate the growing demand for petroleum products, but which may now displace some of that demand. These efforts include such policies as increasing the volume of ethanol in the gasoline supply, improving vehicle fuel efficiency, and encouraging the purchase of vehicles powered by natural gas or electricity."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.; Andrews, Anthony; Pirog, Robert L.

  2010-11-22
• Tax Issues and the Gulf of Mexico Oil Spill: Legal Analysis of Payments and Tax Relief Policy Options [July 15, 2010]

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  "The explosion of the Deepwater Horizon oil rig and subsequent oil spill into the Gulf of Mexico has led to substantial damages, particularly in the form of lost wages and income. BP has begun to make interim payments to compensate for lost income resulting from the oil spill. Given the magnitude of the economic disruption resulting from the spill, however, policymakers may consider exploring alternative mechanisms for providing relief to the affected region. One option is to provide relief through the tax code by adopting measures similar to those employed following past major disasters. BP is currently making interim payments to claimants 'who are not receiving their ordinary income or profit' during the cleanup phase. The IRS [Internal Revenue Service] has released guidance regarding the tax treatment of these payments in an effort to help taxpayers understand the tax implications of receiving claims payments from BP. This report provides a legal analysis of the tax status of payments received from BP by Gulf Coast victims under current law, and discusses potential legal distinctions between payments received for lost income versus those that may be received to compensate for property loss and physical injuries. Further, this report comments on the tax implications in the event a federal disaster declaration is issued with respect to this incident."

  Library of Congress. Congressional Research Service

  Lunder, Erika; Liu, Edward C.; Sherlock, Molly F.

  2010-07-15
• Energy Tax Incentives: Measuring Value Across Different Types of Energy Resources [August 10, 2011]

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  "The majority of energy produced in the United States is derived from fossil fuels. In recent years, however, revenue losses associated with tax incentives that benefit renewables have exceeded revenue losses associated with tax incentives benefitting fossil fuels. As Congress evaluates the tax code and various energy tax incentives, there has been interest in understanding how energy tax benefits under the current tax system are distributed across different domestic energy resources. […] According to data presented in the EIA [Energy Information Administration] reports, the share of direct federal financial support for electricity produced using coal, natural gas and petroleum, and nuclear energy resources was similar in 2007 and 2010. Between 2007 and 2010, however, the share of federal financial support for electricity produced by renewables increased substantially, and federal financial support for refined coal disappeared. An alternative method for evaluating the relative value of tax incentives available across various energy resources is to use an effective tax rate approach. Effective tax rates can be used to measure how the tax system affects incentives for capital investment. In 2007, the tax code produced strong incentives for investment in wind and solar electric energy resources. The effective tax rate approach also highlights the difference in impact of oil and gas tax incentives depending on the type of oil and gas company. The tax code creates stronger capital investment incentives for non-integrated oil and gas producers, relative to their integrated counterparts. This difference can be explained through the ability of non-integrated petroleum producers to take percentage depletion and fully expense intangible drilling costs (IDCs)."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2011-08-10
• Major Fiscal Issues Before Congress in FY2013 [August 10, 2012]

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  From the Document: "The federal budget deficit has exceeded $1 trillion in each of the last three fiscal years and is expected to exceed that level in FY2012. Concern over these large deficits, as well as the long-term trajectory of the federal budget, has resulted in significant debate during the 112th Congress over how to achieve meaningful deficit reduction and how to implement a plan to stabilize the federal debt. At the same time, the economy is recovering from its largest downturn since the Great Depression, and concerns have been expressed that growth in the United States may falter to the point where the U.S. economy again experiences recession. This has resulted in some renewed debate over whether additional stimulus may be needed. Over the next few months through the early part of calendar year 2013, Congress will be facing choices on how to deal with numerous expiring provisions, across-the-board spending cuts, and other short-term considerations that will have major effects on the federal budget. Some have referred to this as the 'fiscal cliff.' Choosing how to address these issues will have a significant impact on the size of the budget deficit and the pace of economic recovery going forward. Further changes to other spending and revenue policies could also address some of the longer-term drivers of projected budgetary imbalance, while simultaneously impacting the economy. This report provides a brief overview of the major tax and spending policy changes set to take effect under current law at the end of 2012 or early in 2013. Collectively, these policies have been referred to by some as the 'fiscal cliff.' The report also includes links to other CRS [Congressional Research Service] reports which provide more information and analysis of the individual provisions discussed below."

  Library of Congress. Congressional Research Service

  Levit, Mindy R.; Sherlock, Molly F.; Hahn, Jim

  2012-08-10
• Corporate Income Tax System: Overview and Options for Reform [September 13, 2012]

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  "Many economists and policymakers believe that the U.S. corporate tax system is in need of reform. There is, however, disagreement over why the corporate tax system needs to be reformed, and what specific policy measures should be included in a reform. To assist policymakers in designing and evaluating corporate tax proposals, this report (1) briefly reviews the current U.S. corporate tax system; (2) discusses economic factors that may be considered in the corporate tax reform debate; and (3) presents corporate tax reform policy options, including a brief discussion of current corporate tax reform proposals. […] This report discusses a number of economic considerations that may be made while evaluating various corporate tax reform proposals. These might include analyses of the likely effect on households of certain reforms (also known as incidence analysis). Policymakers might also want to consider how certain corporate tax provisions contribute to the allocation of economic resources, choosing policies that promote an efficient use of resources. Other goals of corporate tax reform may include designing a system that is simple to comply with and administer, while also promoting competitiveness of U.S. corporations."

  Library of Congress. Congressional Research Service

  Keightley, Mark P.; Sherlock, Molly F.

  2012-09-13
• Residential Energy Tax Credits: Overview and Analysis [September 25, 2012]

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  "Residential energy efficiency can benefit consumers through reduced utility bills, and support national environmental policy objectives by reducing the demand for electricity generated using fossil-fuels and reducing current strains on the electric power grid. Various policies to increase conservation and energy efficiency have been adopted since the 1970s, including tax incentives. Developing and deploying technologies that are consistent with the most efficient use of our nation's energy resources is broadly appealing. What remains unclear, however, is what set of policy tools the federal government should employ to meet energy-efficiency objectives. In 2010, 23% of total energy consumed in the United States was consumed by the residential sector (see Figure 1). Residential-sector energy use has been increasing over time, with the residential sector today consuming roughly 8% more energy in 2010 than in 2000. Residential energy use per capita, however, has remained relatively constant since the 1970s (see Figure 2). Thus, while overall demand for energy in the residential sector has increased with population growth, efficiency gains have allowed residential energy use per capita to remain relatively flat even as consumers increasingly use energy-demanding technologies. Although energy-efficiency gains have been made in recent decades, experts suggest that a large potential for increased energy efficiency in the residential sector remains. Despite this potential, concerns remain that consumers may not invest in the optimal level of energy efficiency. If this potential for enhanced energy efficiency is realized in the coming decades, residential energy use trends could change, perhaps leading to reduced residential energy use per capita over time. However, population growth may still result in continued increases in total residential energy use. This report explores one policy option for promoting residential energy efficiency: tax credits. It begins by providing an overview of the current residential energy-efficiency tax credits (appendices to this report provide a more detailed legislative history). The report then goes on to provide an economic rationale for residential energy-efficiency tax incentives, introducing the concept of 'market failures' and 'market barriers' which may lead to suboptimal or 'economically inefficient' investment in energy-efficiency technologies. That section summarizes various market failures and market barriers in the residential energy sector and outlines ways tax incentives correct them. The final sections of this report provide an economic analysis of the primary tax incentives for residential energy efficiency and briefly review various policy options."

  Library of Congress. Congressional Research Service

  Crandall-Hollick, Margot L.; Sherlock, Molly F.

  2012-09-25
• Energy Tax Incentives: Measuring Value Across Different Types of Energy Resources [September 18, 2012]

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  "The majority of energy produced in the United States is derived from fossil fuels. In recent years, however, revenue losses associated with tax incentives that benefit renewables have exceeded revenue losses associated with tax incentives benefitting fossil fuels. As Congress evaluates the tax code and various energy tax incentives, there has been interest in understanding how energy tax benefits under the current tax system are distributed across different domestic energy resources. In 2010, fossil fuels accounted for 78.0% of U.S. primary energy production. The remaining primary energy production is attributable to nuclear electric and renewable energy resources, with shares of 11.2% and 10.7%, respectively. Primary energy production using renewable energy resources includes both electricity generated using renewable resources, including hydropower, as well as renewable fuels (e.g., biofuels). The value of federal tax support for the energy sector was estimated to be $19.1 billion in 2010. Of this, roughly one-third ($6.3 billion) was for tax incentives that support renewable fuels. Another $6.7 billion can be attributed to tax-related incentives supporting various renewable energy technologies (e.g., wind and solar). Targeted tax incentives supporting fossil energy resources totaled $2.4 billion. This report provides an analysis of the value of energy tax incentives relative to primary energy production levels. Relative to their share in overall energy production, renewables receive more federal financial support through the tax code than energy produced using fossil energy resources. Within the renewable energy sector, relative to the level of energy produced, biofuels receive the most tax-related financial support."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2012-09-18
• Tax Provisions Expiring in 2011 and 'Tax Extenders' [December 1, 2011]

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  "A number of temporary tax provisions are scheduled to expire at the end of 2011. Notably, the temporary two-percentage-point reduction in the payroll tax rate for individuals was enacted, at the end of 2010, as a one-year temporary provision. Other provisions scheduled to expire at the end of 2011 include the Alternative Minimum Tax (AMT) 'patch,' as well as a number of previously extended temporary provisions known as 'tax extenders.' This report provides a concise overview of tax provisions scheduled to expire at the end of 2011. Table 1 below lists all provisions scheduled to expire at the end of 2011. CRS [Congressional Research Service] products providing additional information and analysis related to specific provisions are noted in footnotes to the tables and text. Some of these provisions, including the two-percentage-point payroll tax cut, were enacted as temporary measures during the 111th Congress. Other provisions, such as the tax credit for research and experimentation expenditures, have been extended numerous times as part of tax extender legislation. In addition to listing all provisions expiring at the end of 2011, Table 1 notes which provisions have previously been extended as part of a tax extender package."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2011-12-01
• Carbon Tax: Deficit Reduction and Other Considerations [September 17, 2012]

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  "The federal budget deficit has exceeded $1 trillion annually in each fiscal year since 2009, and deficits are projected to continue. Over time, unsustainable deficits can lead to reduced savings for investment, higher interest rates, and higher levels of inflation. Restoring fiscal balance would require spending reductions, revenue increases, or some combination of the two. Policymakers have considered a number of options for raising additional federal revenues, including a carbon tax. A carbon tax could apply directly to carbon dioxide (CO2) and other greenhouse gas (GHG) emissions, or to the inputs (e.g., fossil fuels) that lead to the emissions. Unlike a tax on the energy content of each fuel (e.g., Btu tax), a carbon tax would vary with a fuel's carbon content, as there is a direct correlation between a fuel's carbon content and its CO2 emissions. Carbon taxes have been proposed for many years by economists and some Members of Congress, including in the 112th Congress. If Congress were to establish a carbon tax, policymakers would face several implementation decisions, including the point and rate of taxation. Although the point of taxation does not necessarily reveal who bears the cost of the tax, this decision involves trade-offs, such as comprehensiveness versus administrative complexity."

  Library of Congress. Congressional Research Service

  Ramseur, Jonathan L.; Leggett, Jane A.; Sherlock, Molly F.

  2012-09-17
• Energy Tax Policy: Issues in the 112th Congress [March 28, 2012]

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  "Energy tax policy has been actively debated in the 112th Congress. Much of this debate has centered around proposals in the President's FY2012 and FY2013 budgets, proposals to eliminate certain tax preferences, and proposals to extend other expired or expiring provisions. The Obama Administration has proposed a number of changes in energy tax policy with the intent of correcting perceived distortions in the market and encouraging conservation and the use of renewable energy. Specifically, the Administration seeks to eliminate a number of existing tax incentives for fossil fuels. Further, the Administration has proposed expanding select incentives for commercial-building energy efficiency, extending incentives to promote manufacturing of advanced energy technologies, extending certain renewable energy incentives, and modifying incentives for alternative technology vehicles. […] 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. In practice, however, energy tax policy in the United States is made in a political setting, determined by fiscal dictates and the views and interests of the key players in this setting, including policymakers, special interest groups, and academic scholars. As a result, enacted tax policy embodies compromises between economic and political goals, which could either mitigate or compound existing distortions."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.; Crandall-Hollick, Margot L.

  2012-03-28
• Tax Issues and the Gulf of Mexico Oil Spill: Legal Analysis of Payments and Tax Relief Policy Options [October 14, 2010]

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  "The explosion of the Deepwater Horizon oil rig and subsequent oil spill into the Gulf of Mexico has led to substantial damages, particularly in the form of lost wages and income. BP has begun to make interim payments to compensate for lost income resulting from the oil spill. Individuals and businesses impacted by the oil spill may file a claim with the Gulf Coast Claims Facility, an independent entity established to administer the claims, with payments coming from an escrow account funded by BP. The tax consequences of these payments to the recipients will depend on the nature of the underlying claim. Payments received for lost wages or income will generally be taxable, while payments for other types of claims, such as physical injury or damage of property, may qualify for exclusion or deferral. Given the magnitude of the economic disruption resulting from the spill, however, policymakers may consider exploring alternative mechanisms for providing relief to the affected region. In the past, Congress has used the tax code as a tool to provide relief to disaster victims. While the Gulf of Mexico oil spill has not been classified as a federally declared disaster, the tax code could be used as a mechanism for delivering additional relief. Tax policy options that could be explored include added casualty loss deductions, an extended net operating loss (NOL) period, employment incentives, enhanced access to retirement savings, and incentives for charitable relief."

  Library of Congress. Congressional Research Service

  Lunder, Erika; Liu, Edward C.; Sherlock, Molly F.

  2010-10-14
• U.S. and World Coal Production, Federal Taxes, and Incentives [March 14, 2013]

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  "Even though U.S. coal production remained strong over the past decade, reaching record levels of production, coal is losing its share of overall U.S. energy production primarily to natural gas. One of the big questions for the industry is how to penetrate the overseas market, particularly in steam coal, to compensate for declining domestic demand. As U.S. energy policy and environmental regulations are constantly debated, there is ongoing congressional interest in the role of coal in meeting U.S. and global energy needs. The question may not be whether the domestic production of coal is here to stay but, rather, how much U.S. coal will be mined, what type, and under what regulatory framework. Energy Information Administration (EIA) statistics show that more than half (55%) of U.S. coal reserves are located in the West, dominated by Montana and Wyoming, which account for 43%. When including the top five producing states (three of which are in the East), 70% of U.S. coal reserves are accounted for. The United States government owns about one third, or 87 billion short tons (BST), of U.S. domestic reserves."

  Library of Congress. Congressional Research Service

  Humphries, Marc; Sherlock, Molly F.

  2013-03-14
• Potential Federal Tax Implications of 'United States v. Windsor' (Striking Section 3 of the Defense of Marriage Act (DOMA)): Selected Issues [July 18, 2013]

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  "This report will provide an overview of the potential federal tax implications for same-sex married couples of the U.S. Supreme Court (SCOTUS) ruling in 'United States v. Windsor', with a focus on the federal income tax. Estate tax issues are also discussed. Importantly, this report focuses on changes in the 'interpretation and administration' of federal tax law that may result from the SCOTUS decision. This decision did not amend federal tax law. This report is not intended to address 'all' tax-related issues that may arise as a result of the 'Windsor' decision. Such discussion is beyond the scope of this report."

  Library of Congress. Congressional Research Service

  Crandall-Hollick, Margot L.; Sherlock, Molly F.; Pettit, Carol A.

  2013-07-18
• Expired and Expiring Temporary Tax Provisions ('Tax Extenders') [April 7, 2014]

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  "Dozens of temporary tax provisions expired at the end of 2013, and several other temporary tax provisions are scheduled to expire at the end of 2014. Most of the provisions that expired at the end of 2013 have been part of past temporary tax extension legislation. Most recently, many temporary tax provisions were extended as part of the American Taxpayer Relief Act (ATRA; P.L. 112-240). Collectively, temporary tax provisions that are regularly extended by Congress--often for one to two years--rather than being allowed to expire as scheduled are often referred to as 'tax extenders.' On April 3, 2014, the Senate Finance Committee voted to report the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act. The EXPIRE Act would extend most expired and soon-to-expire provisions through 2015. An earlier proposal, S. 1859, introduced by Senator Reid on December 19, 2013, would provide a one-year extension for provisions that expired in 2013. House Ways and Means Committee Chairman Dave Camp has indicated that extenders will be addressed in the Ways and Means Committee during 2014. Chairman Camp has emphasized that extenders should be evaluated to see which provisions should be made permanent."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2014-04-07
• Expired and Expiring Temporary Tax Provisions ('Tax Extenders') [April 3, 2014]

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  "There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis provides legislators with an opportunity to evaluate the effectiveness of tax policies prior to expiration or extension. Temporary tax provisions may also be used to provide temporary economic stimulus or disaster relief. Congress may also choose to enact tax provisions on a temporary rather than permanent basis due to budgetary considerations, as the foregone revenue from a temporary provision will generally be less than if it was permanent. The provisions that expired at the end of 2013 are diverse in purpose, including provisions for individuals, businesses, the charitable sector, energy, community assistance, and disaster relief. Among the individual provisions that expired are deductions for teachers' out-of-pocket expenses, state and local sales taxes, qualified tuition and related expenses, and mortgage insurance premiums. On the business side, under current law, the R&D [Research and Development] tax credit, the WOTC [Work Opportunity Tax Credit], the active financing exceptions under Subpart F, and increased expensing and bonus depreciation allowances will not be available for taxpayers after 2013. Expired charitable provisions include the enhanced deduction for contributions of food inventory and provisions allowing for tax-free distributions from retirement accounts for charitable purposes. The renewable energy production tax credit (PTC) expired at the end of 2013, along with a number of other incentives for energy efficiency and renewable and alternative fuels. The new markets tax credit, a community assistance program, also expired at the end of 2013."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2014-04-03
• Energy Tax Policy: Issues in the 113th Congress [May 8, 2014]

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  "The 113th Congress is considering the possible extension of several expired energy tax provisions. The Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act of 2014 (S. 2260) would temporarily extend, through 2015, most expired energy tax provisions, including the renewable energy production tax credit (PTC). Under current law, renewable energy projects that begin construction after the end of 2013 will not qualify for the PTC. Other expired energy tax provisions include those that support building energy efficiency and renewable and alternative fuels. Energy tax policy may also be considered as part of comprehensive tax reform legislation in the 113th Congress. A base-broadening approach to tax reform might consider the elimination of various energy tax expenditures in conjunction with a reduction in overall tax rates. This was the approach taken in House Ways and Means Committee Chairman Dave Camp's proposal, the Tax Reform Act of 2014. Alternative revenue sources, such as a carbon tax, may also be evaluated as part of the tax reform process. The President's FY2015 budget proposes a number of changes to energy tax policy. The Obama Administration proposes to repeal a number of existing tax incentives for fossil fuels, while providing new or expanded incentives for alternative and advanced technology vehicles, renewable electricity, energy efficiency, and advanced energy manufacturing."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2014-05-08
• Clean Coal Loan Guarantees and Tax Incentives: Issues in Brief [August 19, 2014]

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  "Coal represents a major energy resource for the United States. Coal-fired power plants provided approximately 37% of U.S. generated electricity (about 1.5 billion megawatt-hours) in 2012, while consuming over 800 million tons of coal. Power plants that use coal are also a major source of greenhouse gas emissions in the United States, contributing approximately 28% of total U.S. CO2 emissions in 2012. As part of federal efforts to reduce greenhouse gas emissions, loan guarantees and tax incentives have been made available to support private sector investment in 'clean coal.' Both loan guarantees and tax incentives were included in the Energy Policy Act of 2005 (EPACT05, P.L. [Public Law] 109-58). [...] Regarding tax incentives, Congress might consider several options: (1) maintain the status quo, which would allow existing tax incentives to phase out; (2) authorize additional funding for existing tax incentives; or (3) redesign tax incentives for clean coal or carbon capture and sequestration related technologies. Several projects that were previously allocated tax credits have been cancelled. A question for Congress is whether there is demand for tax benefits in their current form. Further, are tax incentives an effective tool for encouraging investment in clean coal technologies?"

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.; Folger, Peter (Peter Franklin)

  2014-08-19
• Energy Tax Policy: Issues in the 113th Congress [September 4, 2013]

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  "The scheduled expiration of a number of energy tax incentives means energy tax policy will likely be considered by the 113th Congress. Under current law, for example, renewable energy projects that begin construction after the end of 2013 will not qualify for the renewable energy production tax credit (PTC). A number of other energy tax incentives, including provisions to support building energy efficiency and renewable fuels, are also scheduled to expire at the end of 2013. In the past, expired and expiring energy tax provisions have been extended as part of 'tax extender' legislation. Energy tax policy may also be considered as part of comprehensive tax reform legislation in the 113th Congress. A base-broadening approach to tax reform might consider the elimination of various energy tax expenditures in conjunction with a reduction in overall tax rates. Alternative revenue sources, such as a carbon tax, may also be evaluated as part of the tax reform process. The President's FY2014 budget proposes a number of changes to energy tax policy. The Obama Administration proposes to repeal a number of existing tax incentives for fossil fuels, while providing new or expanded incentives for alternative and advanced technology vehicles, renewable electricity, energy efficiency, and advanced energy manufacturing."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2013-09-04
• Potential Federal Tax Implications of 'United States v. Windsor' (Striking Section 3 of the Defense of Marriage Act (DOMA)): Selected Issues [September 9, 2013]

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  "This report will provide an overview of the potential federal tax implications for same-sex married couples of the U.S. Supreme Court ruling in 'United States v. Windsor', with a focus on the federal income tax. Estate tax issues are also discussed. Importantly, this report focuses on changes in the 'interpretation and administration' of federal tax law resulting from the Court's decision. The decision itself did not amend federal tax law. This report is not intended to address 'all' tax-related issues that may arise as a result of the 'Windsor' decision. Such discussion is beyond the scope of this report."

  Library of Congress. Congressional Research Service

  Crandall-Hollick, Margot L.; Sherlock, Molly F.; Pettit, Carol A.

  2013-09-09
• Tax Provisions Expiring in 2013 ('Tax Extenders') [November 5, 2013]

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  "Dozens of temporary tax provisions are scheduled to expire at the end of 2013 under current law. Most of the provisions set to expire in 2013 have been part of past temporary tax extension legislation. Most recently, many temporary tax provisions were extended as part of the American Taxpayer Relief Act (ATRA; P.L. 112-240). Collectively, temporary tax provisions that are regularly extended by Congress--often for one to two years--rather than being allowed to expire as scheduled are often referred to as 'tax extenders.' […] There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis provides legislators with an opportunity to evaluate the effectiveness of tax policies prior to expiration or extension. Temporary tax provisions may also be used to provide temporary economic stimulus or disaster relief. Congress may also choose to enact tax provisions on a temporary rather than permanent basis due to budgetary considerations, as the foregone revenue from a temporary provision will generally be less than if it was permanent. The provisions that are scheduled to expire in 2013 are diverse in purpose, including provisions for individuals, businesses, the charitable sector, energy, community assistance, and disaster relief. Among the individual provisions scheduled to expire are deductions for teachers' out-of-pocket expenses, state and local sales taxes, qualified tuition and related expenses, and mortgage insurance premiums."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2013-11-05
• Tax Reform in the 113th Congress: An Overview of Proposals [March 24, 2014]

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  "Many agree that the U.S. tax system is in need of substantial reforms. The 113th Congress continues to explore ways to make the U.S. tax system simpler, fairer, and more efficient. Identifying and enacting policies that will result in a simpler, fairer, and more efficient tax system remains a challenge. On February 26, 2014, House Ways and Means Committee Chairman Dave Camp released a comprehensive tax reform discussion draft, the Tax Reform Act of 2014. This draft proposes substantial changes to both the individual and corporate income tax systems, reducing statutory tax rates for many taxpayers, while repealing dozens of credits, deductions, and other tax preferences. The Tax Reform Act of 2014 builds on previously released discussion drafts related to international tax, financial products, and small business. Earlier in the 113th Congress, former Senate Finance Committee Chairman Max Baucus released several tax reform discussion drafts, addressing international tax, cost recovery, tax administration, and energy tax policy."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2014-03-24
• Tax Reform in the 114th Congress: An Overview of Proposals [July 9, 2015]

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  "Many agree that the U.S. tax system is in need of reform. Congress continues to explore ways to make the U.S. tax system simpler, fairer, and more efficient. Identifying and enacting policies that will result in a simpler, fairer, and more efficient tax system remains a challenge. On December 10, 2014, the Chairman of the House Committee on Ways and Means introduced a comprehensive tax reform proposal, the Tax Reform Act of 2014 (H.R. 1). The bill proposed substantial changes to both the individual and corporate income tax systems, reducing statutory tax rates for many taxpayers, while repealing dozens of credits, deductions, and other tax preferences. While no further action was taken on H.R. 1 in the 113th Congress, the proposal continues to inform the ongoing tax reform debate. There are various policy options for achieving comprehensive tax reform. One option is a base-broadening, rate-reducing tax reform, in the spirit of the Tax Reform Act of 2014. An alternative approach would be to substantially revise or eliminate the current tax system, instead relying on an alternative tax base for revenues. Tax reform legislation introduced early in the 114th Congress has tended to take the latter approach, proposing a retail sales tax at the federal level or a flat tax. Similar proposals were introduced in the 112th and 113th Congresses, and did not advance."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.; Keightley, Mark P.

  2015-07-09
• Energy Tax Policy: Issues in the 114th Congress [September 4, 2015]

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  "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."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.; Stupak, Jeffrey M.

  2015-09-04
• Corporate Income Tax System: Overview and Options for Reform [December 1, 2014]

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  "Many economists and policy makers believe that the U.S. corporate tax system is in need of reform. There is, however, disagreement over why the corporate tax system needs to be reformed, and what specific policy measures should be included in a reform. To assist policy makers in designing and evaluating corporate tax proposals, this report (1) briefly reviews the current U.S. corporate tax system; (2) discusses economic factors that may be considered in the corporate tax reform debate; and (3) presents corporate tax reform policy options, including a brief discussion of current corporate tax reform proposals. […] In 2014, the sum of all corporate tax expenditures was $154.4 billion. The significance of the corporate tax as a federal revenue source has declined over time. At its post-WWII peak in 1952, the corporate tax generated 32.1% of all federal tax revenue. In 2013, the corporate tax accounted for 9.9% of federal tax revenue. The decline in corporate revenues is a combination of decreasing effective tax rates, an increasing fraction of business activity that is being carried out by pass-through entities (particularly partnerships and S corporations, which are not subject to the corporate tax), and a decline in corporate sector profitability. […] This report discusses a number of economic considerations that may be made while evaluating various corporate tax reform proposals. These might include analyses of the likely effect on households of certain reforms (also known as incidence analysis). Policy makers might also want to consider how certain corporate tax provisions contribute to the allocation of economic resources, choosing policies that promote an efficient use of resources."

  Library of Congress. Congressional Research Service

  Keightley, Mark P.; Sherlock, Molly F.

  2014-12-01
• Energy Tax Policy: Issues in the 114th Congress [January 22, 2015]

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  "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. Energy tax policy may also be considered as part of comprehensive tax reform legislation in the 114th Congress. A base-broadening approach to tax reform might consider the elimination of various energy tax expenditures in conjunction with a reduction in overall tax rates. This was the approach taken in the Tax Reform Act of 2014 (H.R. 1), introduced late in the 113th Congress by then-Chairman of the House Ways and Means Committee Dave Camp. Alternative revenue sources, such as a carbon tax, may also be evaluated as part of the tax reform process. The Obama Administration has also proposed a number of changes to energy tax policy as part of its annual budget proposal. In the past, the Administration has proposed repealing a number of existing tax incentives for fossil fuels, while providing new or expanded incentives for alternative and advanced technology vehicles, renewable electricity, energy efficiency, and advanced energy manufacturing."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.; Stupak, Jeffrey M.

  2015-01-22
• Federal Tax Treatment of Married Same-Sex Couples [July 30, 2015]

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  "This report provides an overview of the federal tax treatment of same-sex married couples, with a focus on the federal income tax. Estate tax issues are also discussed. The administration of federal tax laws for married same-sex couples changed as a result of the U.S. Supreme Court ruling in 'United States v. Windsor' in 2013, striking down Section 3 of the Defense of Marriage Act. The administration of federal tax laws was not affected by the June 26, 2015, ruling in 'Obergefell v. Hodges'. 'Obergefell' struck down state bans on same-sex marriage, holding that all states must both permit same-sex couples to marry in their states and recognize same-sex marriages that were formed in other states. While it did not change the administration of federal income tax laws, the 'Obergefell' decision may affect the number of same-sex couples who decide to marry (and hence the number of federal and state tax returns filed by married couples). Analysis of changes to individuals' state tax liabilities resulting from the 'Obergefell' decision is beyond the scope of this report; however, state tax changes may ultimately affect federal tax liabilities for those couples who itemize deductions on their federal returns. This report focuses on changes in the 'interpretation and administration' of federal tax law resulting from the Court's 'Windsor' decision. The decision itself did not amend federal tax law. This report is not intended to address all tax-related issues that may arise as a result of the federal recognition of same-sex marriages for tax purposes. Such discussion is beyond the scope of this report."

  Library of Congress. Congressional Research Service

  Crandall-Hollick, Margot L.; Pettit, Carol A.; Sherlock, Molly F.

  2015-07-30
• Tax Provisions That Expired in 2014 ('Tax Extenders') [September 4, 2015]

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  "In the past, Congress has regularly acted to extend expired or expiring temporary tax provisions. Collectively, these temporary tax provisions are often referred to as 'tax extenders.' Fifty-two temporary tax provisions expired at the end of 2014. This report provides a broad overview of the tax extenders. Congress last acted on tax extenders towards the end of the 113th Congress. The Tax Increase Prevention Act of 2014 (P.L. 113-295), signed into law on December 19, 2014, made tax provisions that had expired at the end of 2013 available to taxpayers for the 2014 tax year. The law extended most (but not all) provisions that had expired at the end of 2013. Most of the provisions in P.L. 113-295 had been included in previous 'tax extender' packages. Tax extenders legislation has also been considered in the 114th Congress. The Senate Finance Committee has reported legislation, the Tax Relief Extension Act of 2015 (S. 1946), that would retroactively extend expired tax provisions, for two years, through 2016. All provisions in S. 1946 have been included in previous 'tax extender' packages. There are several reasons why Congress may choose to enact tax provisions on a temporary basis. Enacting provisions on a temporary basis provides legislators with an opportunity to evaluate the effectiveness of tax policies prior to expiration or extension. Temporary tax provisions may also be used to provide temporary economic stimulus or disaster relief. Congress may also choose to enact tax provisions on a temporary rather than permanent basis due to budgetary considerations, as the foregone revenue from a temporary provision will generally be less than if it was permanent."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.

  2015-09-04
• Tax Reform in the 114th Congress: An Overview of Proposals [March 18, 2016]

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  "Many agree that the U.S. tax system is in need of reform. Congress continues to explore ways to make the U.S. tax system simpler, fairer, and more efficient. Identifying and enacting policies that will result in a simpler, fairer, and more efficient tax system remains a challenge. On December 10, 2014, the chairman of the House Committee on Ways and Means introduced a comprehensive tax reform proposal, the Tax Reform Act of 2014. The bill proposed substantial changes to both the individual and corporate income tax systems, reducing statutory tax rates for many taxpayers, while repealing dozens of credits, deductions, and other tax preferences. […] There are various policy options for achieving comprehensive tax reform. One option is a base-broadening, rate-reducing tax reform, in the spirit of the Tax Reform Act of 2014. An alternative approach would be to substantially revise or eliminate the current tax system, instead relying on an alternative tax base for revenues. Tax reform legislation introduced early in the 114th Congress has tended to take the latter approach, proposing a retail sales tax at the federal level or a flat tax. Similar proposals were introduced in the 112th and 113th Congresses, and did not advance. A cash flow tax for businesses has also been introduced in the 114th Congress. Both Congress and the Administration have indicated interest in tax reform through their respective budget processes. The budget resolution for FY2016 communicates congressional support for action on tax reform. The President's FY2017 budget proposes a number of tax policy changes, similar to the President's FY2016 budget, including substantial changes in the international tax system."

  Library of Congress. Congressional Research Service

  Sherlock, Molly F.; Keightley, Mark P.

  2016-03-18