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CRS Analysis Critical of Energy Taxes

JAN. 12, 2000

RL30406

DATED JAN. 12, 2000
DOCUMENT ATTRIBUTES
  • Authors
    Lazzari, Salvatore
  • Institutional Authors
    Congressional Research Service
  • Subject Area/Tax Topics
  • Index Terms
    legislation, tax
    budget, federal
    tax policy, energy
    tax policy, energy, oil and gas
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2000-3773 (22 original pages)
  • Tax Analysts Electronic Citation
    2000 TNT 26-38
Citations: RL30406

                       CRS REPORT FOR CONGRESS

 

 

                          January 12, 2000

 

 

                          Salvatore Lazzari

 

                    Specialist in Public Finance

 

              Resources, Science, and Industry Division

 

 

                              ABSTRACT

 

 

     The report provides background on the theory and application of

 

     tax policy as it relates to the energy sector, particularly with

 

     respect to the theory of market failure in the energy sector and

 

     the suggested tax policy remedies.

 

 

SUMMARY

[1] The report provides background on the theory and application of tax policy as it relates to the energy sector, particularly with respect to the theory of market failure in the energy sector and the suggested policy remedies. This background provides a context for understanding how current or proposed energy tax policy may affect other policy objectives or be affected by such objectives.

[2] Economic theory suggests that producers of energy-related minerals be taxed no differently than non-mineral producers: Exploration and development costs and other investments in a deposit should be capitalized. In general, competitive mineral producers subject to pure income tax would not exploit resources as fast (compared with the rate of exploitation under the present system of subsidies). Over the longer term, depletion of mineral resources leads to higher real energy prices, which would eventually promote the optimal amount of investment in energy efficiency and alternative fuels supply. However, even under a pure income tax, economic efficiency suggests a system of energy taxes (in addition to the income taxes) to correct for any environmental externalities caused by the production, importation and use of each fuel, and energy taxes in the form of user charges for benefits received such as the highway trust fund. Under principles of neutrality of tax policy, there is no purely economic rationale for energy taxes or tax subsidies to: 1) raise revenues; 2) conserve energy (with one exception); 3) promote alternative fuels; 4) compensate for any extra market risk or 5) to promote, as an industrial policy, specific industries. In the case of energy conservation, market failures in the use of energy in rental housing provide an efficiency rationale for the current gross income exclusion for conservation subsidies provided by electric utilities. There are other market failures in energy use which suggest efficiency standards, energy labeling, or government provided information, but not necessarily tax subsidies.

[3] Tax subsidies for domestic oil production tend to stimulate the domestic supply of petroleum, reduce the demand for imports. This may enhance national and economic security in the short run, but it might damage national and economic security in the long run as domestic energy resources are depleted faster than they otherwise would be. The economically efficient policy to reduce import dependence would impose a tax (or tariff) on imported petroleum based on the per-barrel estimate of these costs (the so- called oil import "premium"). The problem of vulnerability to embargoes and price shocks, which relates to dependence on imported oil from the Organization of Petroleum Exporting Countries (OPEC) and other potentially unstable or unfriendly foreign countries, is more effectively addressed in a policy of stockpiling oil as is being done with the Strategic Petroleum Reserve.

[4] In terms of environmental protection use of energy taxes can be a cost-effective and efficient market-based instrument of environmental management; economically they are superior to the command and control approach to environmental protection. In sum, energy taxes are generally distortional (except to correct for externalities, or when imposed as user fees for benefits received) and regressive, and may have adverse macroeconomic consequences, particularly sizeable taxes on energy production or oil imports.

 CONTENTS

 

 

 Introduction

 

 

 Neutral Income Tax Treatment of Fossil Fuel Producers

 

 

 Externalities and Other Market Failures, and the Rationale for Energy

 

   Taxes and Subsidies

 

      Environmental Pollution Externalities

 

      Oil Import Dependence

 

      Production/Investment Risk

 

      Energy User Charges

 

      Taxes vs. Tax Subsidies (Incentives)

 

      Energy Tax Subsidies as an Industrial Policy

 

      The Social Rate of Discount and Market Failures

 

 

 Energy Conservation and Energy Efficiency

 

 

 Renewable vs. Conventional Fuels

 

      Does Oil and Gas Have a Competitive Advantage?

 

 

 Energy Taxes to Increase Revenues and Reduce Deficits

 

 

 Energy Taxes vs. Regulation to Achieve Environmental Policy Goals

 

      Taxes or Tradeable Emissions Permits

 

 

 The Economic Effects of Energy Taxes

 

      Efficiency Effects

 

      Distributional Effects

 

      Macroeconomic Effects

 

 

 LIST OF TABLES

 

 

 Table 1. Energy Market Failures and Energy Tax Policy Remedies

 

 

INTRODUCTION

[5] Every year Members of Congress and others propose to alter the tax treatment of energy producers, and propose energy taxes and subsidies to promote energy conservation and the supply of alternative fuels. In the 106th Congress alone, nearly 150 such bills were introduced in the 1st session.

[6] Proposals to amend the current federal tax treatment of the energy industry, and to either impose energy taxes or provide tax subsidies, raise several important economic and other public policy issues:

     o the federal tax treatment of the energy industry, including

 

       the tax treatment of investments in oil and gas wells and coal

 

       mines, and the tax treatment of other expenses such as

 

       exploration and development costs;

 

 

     o how the tax code is to allow for depletion of mineral reserves

 

       and other mineral production expenses;

 

 

     o the economic rationale for energy taxes or energy tax

 

       subsidies to encourage greater energy conservation or

 

       increased supply of alternative fuels;

 

 

     o the economic effects -- the effects on allocational

 

       efficiency, distribution of income, macroeconomic effects,

 

       effects on energy supply, demand, and imports -- of taxing or

 

       subsidizing energy

 

 

[7] This report provides an overview for policymakers on the types of energy tax policy interventions that are likely to improve economic efficiency -- the efficiency with which the economic system allocates resources -- and the general welfare.

[8] The report provides background on the theory and application of tax policy as it relates to the energy sector, particularly with respect to the theory of market failure in the energy sector and the possible policy remedies. This background provides a context for understanding how current or proposed energy tax policy may affect other policy objectives or be affected by such objectives.

NEUTRAL INCOME TAX TREATMENT OF FOSSIL FUEL PRODUCERS

[9] Under generally accepted economic and accounting principles, producers of depletable resources (such as oil, gas, or coal), who attempt to maximize profits over a finite stock of a resource, should be taxed in the same manner as non-energy producers not subject to the finite resource constraint. Under a pure income tax, depreciation deductions would be based on economic depreciation; exploration and development drilling expenditures would be depreciated (capitalized) instead of expensed (entirely deducted from current-year taxable income) as is currently done; and depletion allowances would be based on the actual decline in economic value of the mineral deposit (or approximated by indexed cost depletion instead of percentage depletion). A neutral tax system would also generally capitalize dry hole costs, the intangible costs of drilling unsuccessful wells, as such expenses may be viewed as part of the cost of developing successful wells -- essentially the costs of creating an asset of value. In the event that there are no successful wells, then a deduction for such costs in the year incurred is appropriate under a neutral income tax system. Such an income tax would be neutral, i.e., it would not distort resource allocation, the optimal allocation that would otherwise result in a competitive market.

[10] The current tax treatment of mineral producers -- which permits expensing of intangible drilling costs and dry hole costs, percentage rather than cost depletion for smaller companies and for some royalty owners, exemption from passive loss limitation rules that apply to other industries, and special tax credits, and other subsidies -- differs from this neutral tax treatment in that it provides several tax subsidies for oil and gas. 1 This can lead to increased investments in locating reserves (increased exploration), more profitable production, and some acceleration of oil and gas production (increased rate of extraction) and excessively rapid depletion of the resource (i.e., they provide an unambiguous incentive to deplete sooner rather than later). It also would lead to a channeling of resources into these activities that otherwise would be used for oil and gas activities abroad or for other economic activities in the United States.

[11] While a change from the present tax system of tax subsidies to a neutral tax system would have a heavy adverse effect on many smaller companies, particularly those that concentrate on onshore exploration, it would be more than offset by the positive welfare effect on the country generally as resources would be allocated more efficiently.

EXTERNALITIES AND OTHER MARKET FAILURES, AND THE RATIONALE FOR ENERGY

 

                         TAXES AND SUBSIDIES

 

 

[12] Perhaps more than other markets, the energy markets have characteristics which can lead to market failure and thus a misallocation of resources. Production, importation, and use of energy frequently generate non-market costs or benefits not accounted for by the producers, importers or consumers (and therefore not measured in the marketplace) that spill over to people who are not a party to the transaction. These spillovers -- or externalities -- are an energy market shortcoming because they are uncompensated, not reflected in the equilibrium market prices for the fuel (because without government intervention there are no economic incentives to do so).

[13] With externalities operating, markets can fail to establish energy prices equal to marginal costs of supply. With inaccurate cost/price signals, a competitive free-market system may fail to achieve the socially optimal mix -- the allocationally efficient mix -- of output. The presence of externalities does not alter the economic argument that competitive mineral producers should be taxed under the same rules as the competitive non-mineral producers, but it does suggest either a separate energy tax (in the case of a negative externality, where production and use of energy generates costs) or an energy tax subsidy (in the case of a positive externality, where the firm's competitive free market output generates benefits to third parties).

[14] Table 1 summarizes the market failures discussion in the report. It lists the types of energy market failures likely to cause economic inefficiencies and the tax policy remedy suggested by economists. The text following the table discusses each of these failures in detail. 2

ENVIRONMENTAL POLLUTION EXTERNALITIES

[15] Environmental damage is perhaps the major negative externality created as a result of energy production and consumption activities. This consists mostly of air pollution resulting from mining, transportation and transmission, and refining and industrial use of oil, gas, and coal, but also includes discharges of effluents into the water, runoff from streets, and damages to the land from mining. For example, coal mining can be the source of external costs such as black lung disease (from underground mining), destruction of landscape, and water pollution from acid drainage. Combustion of coal in coal-fired powerplants produces large emissions of harmful gases, fine particulate matter and urban smog linked to a wide range of health and environmental damages. 3 The use (or combustion) of fossil fuels at the final consumer level by households, motorists, and businesses is also a significant source of air pollution and other environmental damages that impose uncompensated costs on society (those not paying for the use of the fuel directly). While much of the air pollution is from the combustion of fossil fuels (gasoline and diesel) in transportation, it also includes industrial and residential fuels such as natural gas, heating oil, and coal.

[16] Most public finance and environmental economists argue that a market-based instrument such as a tax, e.g., an emissions tax in the case of air pollution from the combustion of fossil fuels, would be an economically preferred instrument to correct for the market distortions caused by the pollution externality. The tax would be equal to the monetary value, per unit of emissions, of the damages to third parties, and structures, and other damages resulting from the harmful emission. While current federal tax law does not provide an example of a theoretically pure pollution tax, the tax on ozone depleting chemicals resembles such a tax. 4 This tax, which is part of Internal Revenue Code (IRC) section 4681 and section 4682, assesses a per-pound tax on the sale or use of a variety of chlorofluorocarbons (CFCs) and other chemicals that have been proven to be harmful to the Earth's ozone layer. The tax varies based on the degree of harm of each of the taxed chemicals, being lowest for methyl chloroform and highest for Halon-1301 5

     TABLE 1. ENERGY MARKET FAILURE AND ENERGY TAX POLICY REMEDIES

 

 _____________________________________________________________________

 

 Type of Market

 

 

    Failure      Description        Distortion      Damage/Benefit

 

 _____________________________________________________________________

 

 Environmental    Air pollution,    Underpricing    Harmful to health,

 

 Externalities    discharges of     of energy       property damage,

 

                  wastes and        resources       and economic

 

                  effluents         and higher      damage

 

                                    production;

 

                                    excessive use

 

                                    due to un-

 

                                    compensated

 

                                    spillover

 

                                    effects

 

 

 Oil Import       Excessive         Underpricing    Harm to national,

 

 Dependence       importation       of crude oil    energy, and

 

                  of crude oil      & petroleum     economic security;

 

                  and petroleum     products        excessive

 

                  products                          defense spending

 

 

 Energy R&D       Manufacturers     Unpriced        Undersupply of

 

                  do not            benefits to     costly and

 

                  undertake         free riding     insufficient

 

                  sufficient        firms from      energy efficiency

 

                  R&D activities    R&D activities  and alternative

 

                                                    fuel technologies

 

 

 Public Goods/    Private market    Under-supply,   Unrealized

 

 Energy           fails to provide  or no supply    benefits;

 

 Complementarity  goods that are    of public       under-developed

 

                  consumed          goods such as   economy, and

 

                  collectively      roads, bridges, productivity

 

                  and for which     infrastructure  growth

 

                  exclusion is

 

                  too costly

 

 

 Landlord/Tenant  Landlords,        Underinvestment Environmental

 

 Problem          tenants have no   in energy       damages, excessive

 

                  incentive to      conservation    import dependence,

 

                  conserve energy   items in        and other damages

 

                                    rental housing  due to excessive

 

                                    (over-          energy use

 

                                    consumption of

 

                                    energy)

 

 _____________________________________________________________________

 

                           [Table continued]

 

 _____________________________________________________________________

 

 Possible Energy         Examples in

 

 Tax Policy              Current Law

 

 _____________________________________________________________________

 

 Emission taxes (or      Tax on Ozone

 

 energy excise taxes     Depleting Chemicals

 

 where feasible)         Under IRC section 4691

 

 

 Oil Import Tax          none

 

 

 Tax subsidies for       Tax credit under IRC

 

 R&D expenditures        section 30, and expensing

 

                         under IRC section 174

 

 

 Benefit charges, and    Excise taxes of

 

 user fees, but also     gasoline, and other

 

 energy taxes and        motor fuels under

 

 congestion pricing      IRC sections 4081-4093

 

 

 Tax incentives for      Exclusion of subsidy

 

 landlords or tenants    from gross income

 

 for energy efficiency   under IRC section 136

 

 investments

 

 _____________________________________________________________________

 

 Source: Adaptation based on Fisher, Anthony and Michael H. Rothkopf.

 

      Market Failure and Energy Policy: The Rationale for Selective

 

      Conservation. Energy Policy, v.17, August, 1989.

 

 

[17] Some have proposed energy taxes based on the assumption that there is roughly a direct proportional relationship between emissions and the quantity of the fuel used. This tax would be imposed on the quantity of polluting fuel used, with rates varying directly with the amount of external cost generated by each fuel based on estimates of the monetary value of the harm to third parties. Thus, it would be highest on coal, then oil, then gas, and any non-polluting renewable energy resources such as hydropower would be either taxed at very low rates or tax exempt, depending the degree of environmental damage. 6 For example, while a carbon tax in theory should be a charge on the emissions of CO [sub] 2, in practice this tax is conceived of as an energy tax on the quantity of three fossil fuels burned -- coal, petroleum, and natural gas -- with the tax rate based on the carbon content, in the ratio of 1.0 to 0.8 to 0.6 respectively. Another example, might be a tax imposed on mobile source tailpipe emissions or on the fuel itself, implemented as an addition to the existing motor fuels excise tax (the taxes on gasoline and diesel fuel). This externality tax would be in addition to the current excise taxes on these fuels that are mainly user charges for the benefits received from federal highway infrastructure. 7

OIL IMPORT DEPENDENCE

[18] A variety of external costs may result when petroleum importers fail to take into account the non-market costs of excessive dependence on imported petroleum from countries that are politically unstable or perhaps unfriendly to the United States. These costs are:

     o the weakened defense posture and greater military

 

       vulnerability in the event of an embargo or supply disruption;

 

 

     o the cost of allocating greater resources to national defense

 

       in order to maintain the level of national security preferred

 

       (compared with the quantity that would be allocated with much

 

       lower oil imports); and

 

 

     o the economic and social costs in terms of unemployment,

 

       inflation, and shortages that would result from an effective

 

       oil embargo, or oil price spikes. 8

 

 

[19] One economically efficient policy to correct for these distortions would impose a tax (or tariff) on imported petroleum based on the per-barrel estimate of these costs (the so-called oil import "premium"). Such a tax, however, would likely violate trade agreements, and thus policymakers focus on alternative policies such as tax incentives for domestic production, which also reduce the demand for imported petroleum.

[20] The problem of vulnerability to embargoes and price shocks, which relates to dependence on imported oil from OPEC and other unstable foreign countries, is distinct from the problem of import dependence, and might be better addressed in a policy of stockpiling oil as is being done with the Strategic Petroleum Reserve.

PRODUCTION/INVESTMENT RISK

[21] Some have argued that oil price volatility might be a possible source of market failure because it raises the risks associated with investing in oil and gas and may result in under- investment in domestic oil and gas extraction. Wide fluctuations in the market price of oil increase investor risk and can inhibit the development of energy resources, both conventional and alternative. However, all prices fluctuate in a free market, although some more than others. And such fluctuations or risks are part of being in business -- they are not necessarily market failures. Further, if oil and gas prices fluctuate "excessively" so that they generate unusual risks that may affect energy, economic, or national security, the preferred approach from an economist's point of view would be to attempt to stabilize the price of oil -- this might be done by a variable oil import tax -- rather than to provide tax subsidies.

ENERGY USER CHARGES

[22] Sometimes energy taxes may act as a quasi user fee, a charge for the benefits received by taxpayers from the provision of a public good or quasi-public good financed from the user fee revenues. This is the economic rationale for the gasoline tax, which charges motorists generally in proportion to their use of the interstate highways and highway infrastructure and uses the revenues to build and maintain that infrastructure. 9 To the extent that charges approximate individual benefits received, the tax would be efficient and equitable. Such taxes, however, are less precise instruments than tolls and other benefit charges because 1) they do not actually charge users for the marginal cost of using the infrastructure (including pavement costs, congestion costs, and environmental costs), and 2) some of the highway trust fund revenues -- currently the revenues from 2.86 cents of the tax -- are allocated for mass transit, which means that motorists are paying to subsidize users of mass transit. It is true that motorists benefit from getting others off the road, but the most efficient way of addressing this congestion cost is to price the use of the roads to account for the congestion externality.

TAXES VS. TAX SUBSIDIES (INCENTIVES)

[23] When the externalities or spillover effects are positive, i.e., when a market transaction or activity confers unpriced benefits on third parties, the market system would undersupply the commodity or activity. The classic case of positive externalities is research and development (R&D) that leads to technological innovations. An individual firm that undertakes R&D activities obviously incurs the cost of these efforts and activities, but it typically does not obtain the entire return, some of which accrues to other firms (free riders) that do not undertake these expenditures. Energy R&D engenders similar spillover effects, whether it is from research in clean-coal technologies, photovoltaic solar systems, electric cars, fuel cells, or energy efficiency technologies. The manufacturer of building equipment and energy-using technologies may not have adequate incentives to support sufficient levels of research to improve building or equipment efficiency because some of the gains may accrue to firms not undertaking the expenditures.

[24] In cases of positive externalities, the social return exceeds the purely private returns to individual companies, and from an economic perspective a subsidy is warranted to bring the marginal costs of production in balance with the marginal social benefit (private benefits + external benefits, at the margin). Such support has produced major innovations in energy efficiency of various energy using-equipment such as heat pumps and resulted in significant reductions in the price of generating alternative energy such as in the case of photovoltaic solar energy. Such is the rationale for the present tax subsidies for such technologies (the tax credit, and expensing treatment of R&D expenditures) as well as government expenditures for R&D, including energy R&D expenditures.

[25] The amount of the subsidy on the product or activity would be the value of the benefits per unit of the commodity traded -- proportional to the spillover -- conferred on the source of the external benefits. Energy R&D is unlikely, however, to require a differential subsidy -- above and beyond that provided for non-energy R&D -- since there is no a priori reason to believe that the external benefits from energy R&D are higher or lower than for non-energy R&D.

ENERGY TAX SUBSIDIES AS AN INDUSTRIAL POLICY

[26] Many of the incentives or subsidies that are proposed for oil and gas as well as for alternative fuels appear to be based on the supposition that government ought to support business, particularly when times are bad. Such, for example, has been the rationale for the numerous proposals to help the domestic oil industry, particularly small producers, that were harmed by the downward trend in crude oil prices since the mid 1980s, and the sharp drop in those prices during 1998-99.

[27] There is no purely economic justification, either on efficiency or stabilization grounds, for using tax subsidies as an industrial or employment policy to help a distressed industry -- including the conventional fossil fuels industry and the alternative fuels industry. An industrial policy is usually the context for government subsidies to businesses whenever those businesses experience sustained or sharp economic hardships, due generally to any cause but targeted toward industries experiencing declining prices, suffering cost/price squeezes, or competition from foreign firms.

[28] Economic theory does recognize that market failures such as barriers to entry into markets, and other failures that inhibit market competition, may be used to justify government intervention. Intervention may also be justified by "externalities" or spillovers, previously discussed. The U.S. and world crude oil markets are certainly not perfectly competitive, as there are elements of market power particularly in the world oil market, which is significantly affected by the Organization of Petroleum Exporting Countries (OPEC). But these markets are certainly more competitive today then they have ever been. It does not appear that whatever imperfections may be exhibited by either the U.S. or world crude oil markets, that they would justify tax subsidies to oil and gas producers on grounds of economic efficiency. Depressed or volatile oil prices (or any other price) are not market failures. An industrial policy is an inefficient way to stimulate aggregate employment.

THE SOCIAL RATE OF DISCOUNT AND MARKET FAILURES

[29] Some have argued that the competitive free-market system may establish interest rates (or private discount rates) that are too high, which may lead producers to discount the future excessively and therefore deplete energy and other minerals too rapidly. Rapid depletion increases environmental damages for the current generation and reduces economic living standards (real income) for future generations who would have a lower capital stock.

[30] In general, economic theory and empirical evidence refute the proposition that competitive markets lead to excessive exploitation of mineral resources. Capital markets are also believed to function fairly close to competition, and there is no market failure that results in interest rates higher than the competitive rates. Even if the argument were true, however, it would at the very least suggest policies to lower interest rates, elimination of all federal tax subsidies for nonrenewable resources, and the imposition of a federal severance tax to reduce production of these resources.

ENERGY CONSERVATION AND ENERGY EFFICIENCY

[31] Energy taxes on producers and consumers that factor in the external costs of energy use, such as air pollution, would contribute significantly to energy conservation by raising energy prices and reducing the demand for energy. The demand for energy would decline both through a direct demand response, i.e., curbing energy use through reductions in output, service or utility levels (e.g., by reducing the number of miles driven, indoor temperatures during winter by turning down the thermostat, etc.) and through substitution of more energy-efficient for less energy-efficient technologies. This would be true for all energy that generates external costs, but is particularly true for fossil fuels, whose external costs are generally greater than for other energy types.

[32] However, energy taxes to encourage conservation should be unnecessary on economic grounds because over the longer term, as depletion gradually diminishes the stock of exhaustible energy resources (such as petroleum), conventional energy prices would be expected to increase in real terms, all else (such as technological advancements and innovations, and the degree of recycling) remaining the same. 10 As a result, more of the energy efficient technologies would become profitable and investment in energy-efficient technologies would increase (for example, more energy efficient housing, automobiles with higher miles per gallon, and more energy efficient industrial equipment such as boilers). 11

[33] Thus, aside from energy taxes or subsidies to correct for energy production and consumption externalities, and aside from possible user charges, economists generally argue there is no economic justification for additional taxes or tax subsidies to encourage greater energy conservation, or energy efficiency. This is because there is generally no market failure in energy use (notwithstanding the environmental externalities discussed above, or the exceptions discussed below) or in investment in energy-using technologies -- at either the household or business level -- that requires such tax subsidies. Just as the competitive market system, corrected for externalities, automatically and efficiently leads to the optimal production and use of energy resources -- i.e., the optimal rate of conservation, it also leads to the optimal amount of investment in energy efficiency technologies. All this is done without the effect of subsidies, in terms of revenue losses and allocational distortions, which reduce aggregate output and the general welfare.

[34] There are four market failures in energy use, however, that may be an economic justification for government intervention but only one is a rationale for certain types of conservation tax subsidies. In rental housing, the tenant and the landlord lack strong financial incentives to invest in energy conservation equipment and materials, even when the benefits clearly outweigh the costs, because the benefits from such conservation may not entirely accrue to the party undertaking the energy-saving expenditure and effort. Builders and buyers may also lack sufficient information, a problem which is also discussed below.

[35] As a general rule, tenants are not going to improve the energy efficiency of a residence that does not belong to them, even if the unit is metered. They might if the rate of return (or payback) is sufficiently large, but most tenants do not occupy rental housing long enough to reap the full benefits of the energy conservation investments. Part of the problem is also that it is not always easy to calculate the energy savings potential (hence, rates of return) from various retrofitting investments. Landlords may not be able to control the energy consumption habits of renters to sufficiently recover the full cost of the energy conservation expenditures, regardless of whether the units are individually metered or not. If the units are individually metered, then the landlord would not undertake such investments since all the benefits therefrom would accrue to the renters, unless a landlord could charge higher rents on apartments with lower utility costs. If the units are not individually metered, but under centralized control, the benefits of conservation measures may accrue largely to the landlord, but even here the tenants may have sufficient control over energy use to subvert the accrual of any gains to the landlord. In such cases, from the landlord's perspective, it may be easier and cheaper to forego the conservation investments and simply pass on energy costs as part of the rents. Individual metering can be quite costly and while it may reduce some of the distortions, it is not likely to completely eliminate these, because even if the landlord can charge higher rents, he may not be able to recover the costs of energy conservation efforts or investments.

[36] These market failures may lead to underinvestment in conservation measures in rental housing and provide the economic rationale for Internal Revenue Code (IRC) section 136, which allows the value of any energy conservation subsidy provided by electric utilities to households to be excluded from gross income. Without such explicit exclusion, such subsidies would be treated as gross income and subject to tax. This exclusion, however, applies to both owner-occupied and rental housing, and to a limited extent to business conservation subsidies.

[37] There are other types of market failures in energy use that may suggest either minimum efficiency standards or government- provided information such as energy efficiency labels. As suggested above, many homeowners may not know the precise payback or rate of return of a particular energy-efficiency enhancing investment, or may not know how to calculate it. This may be a particularly serious problem for older homes, which are less energy efficient then newer models -- those built since the energy crisis of the 1970s. This market failure problem suggests government-provided information as a solution, however, rather than tax subsidies.

[38] A third energy market failure arises out of asymmetric information between energy consumers and manufacturers of energy efficient equipment. The energy consumer may have little incentive to become fully informed about the energy efficiency of a particular energy-using or -saving item, while the producer, who has complete and accurate information, doesn't have the incentive to produce a higher priced and more energy efficient product, since it is might be more difficult to market and sell such a product. Thus, while a particular energy-saving device may have a high rate of return, the market may not provide it. This problem suggests either government mandated efficiency standards or labeling as is currently being done with appliance energy labels and fuel economy labels.

[39] Finally, although capital markets are generally competitive and efficient, low-income consumers may have difficulty acquiring loans for conservation investments, even when such investments are profitable (the present value of the energy expenditure savings is greater than the capital costs). This suggests that low or zero interest rate loans for low income consumers or even weatherization grants could address the problem.

RENEWABLE VS. CONVENTIONAL FUELS

[40] The higher energy prices that would result from externality taxes imposed on conventional energy to address external costs would also lead to more investment to increase the supply of alternative fuels, which would, in time, lead to even more conservation of (reduced demand for) conventional fuels. Over the longer term, the supply of these alternatives would tend to increase as depletion of conventional energy raises its real price. Even without increases in conventional fuel prices, alternative energy could gain a price advantage through future technological advances.

[41] As in the case of energy conservation, there are no externalities or market failures that cause under-investment in alternative energy technologies and under-supply of alternative fuels. The private market system works effectively and efficiently in developing any form of energy and its technologies if there are sufficient profit incentives, i.e., if the rate of return on such investments is above the opportunity cost of capital. Moreover, the market ensures that the least-cost, most efficient alternatives become commercialized first, and the market adjusts quickly and efficiently to the changing dynamics of the marketplace.

[42] In general, in cases where alternative fuels have difficulty penetrating the market, it is because they cannot be competitively priced, relative to conventional fuels, generally because either oil prices are too low, capital costs of alternative fuels technologies are too high, or both. To illustrate, compare the estimated 30-year levelized costs, per unit of electrical output, and the capital costs of various technologies for producing electricity using conventional fuels (primarily coal, but also natural gas) and alternative fuels such as biomass and wind energy systems. 12 Electric utilities can upgrade existing coal-fired units at a cost of 2.00 cents/KWh, or they can invest in the latest efficient and cleaner technology (the advanced combined-cycle natural gas unit) at a cost of about 3.5 cents/KWh. These are substantially lower than some estimates of the cost/KWh of the following energy alternatives: 15.0 cents for photovoltaics; 5-10 cents for small hydroelectric; 6-8 cents for solar thermal power; 4-7 cents for wind power; and 4-6 cents for biomass. Much of these cost differences are due to the significantly higher capital costs of generating electricity with alternative energy resources ($7,000/KW for photovoltaics, $1,500/KW for biomass, $1,000/KW for wind) as compared with conventional fuels ($400/KW for the combined cycle natural gas and $200/KW for retrofitting existing coal-fired units). 13

[43] Volatile oil prices can increase investor risk and inhibit the development of alternative, renewable (solar, wind, etc.) and unconventional resources. This is because oil is the benchmark energy resource that sets the long-term price (and therefore influences the profitability) of all other fuels. Hypothetically, if alternative fuels would be profitable at oil prices of $40 per barrel, but prices fluctuate between $20 per barrel and $60 per barrel, there will generally be less investment in renewable and unconventional resources than if the price were stable at $40 every year. However, as discussed before, tax subsidies for alternative fuels are a costly and inefficient policy to correct for such risks.

DOES OIL AND GAS HAVE A COMPETITIVE ADVANTAGE?

[44] It is sometimes argued that alternative fuels such as solar and wind energy and other 'renewables' are at a competitive disadvantage, vis-a-vis fossil fuels, because of the production tax subsidies -- expensing, percentage depletion, and others -- bestowed on the oil and gas industry over decades, and that this justifies countervailing subsidies to alternative fuels to "level the playing field." Historically the large tax subsidies for oil and gas -- which totaled tens of billions of dollars to date -- helped keep domestic and world oil prices low, encouraged consumption, and discouraged the development of alternatives fuels. Past subsidies, however, do not determine the economic viability of alternative fuels at the present time -- past subsidies do not significantly affect the current competitive structure of the energy market.

[45] As to the current oil and gas tax subsidies, there are two reasons that these subsidies are unlikely to reduce the competitiveness of alternative fuels. First, current oil and gas tax subsidies are smaller than they have been historically. Indeed, some evidence suggests that current oil and gas tax subsidies are smaller, in relationship to industry size, than the tax subsidies for alternative fuels. 14 Second, and more importantly, the structure of the world crude oil market since the 1970s has changed in a fundamental but critical way: crude oil prices have since the 1970s been determined in a world oil market, a market which has become more competitive and in which U.S. domestic producers are price takers. In such a market, the subsidies for oil and gas have little if any effect on the market price of crude oil, hence little, if any, effect on the competitiveness of alternative fuels.

ENERGY TAXES TO INCREASE REVENUES AND REDUCE DEFICITS

[46] Energy taxes have also been proposed for primarily fiscal reasons -- to generate revenues for deficit reduction. The first federal gasoline tax was enacted in 1932 (at 1 cent/gal. for gasoline and 2 cents for diesel fuel) as a way of cushioning federal deficits, which were mounting with the Great Depression. Energy tax proposals for deficit reduction were commonplace during the 1982-1993 period as deficits mounted due to huge tax cuts under the Economic Recovery Tax Act of 1981 (P.L. 97-34), reduced inflation, economic recession, defense buildups, and the federal inability to control spending. Several energy taxes were proposed at that time:

     o an increase in the excise taxes on gasoline, diesel, and other

 

       motor fuels;

 

 

     o a sizeable tax on imported oil (in addition to the customs

 

       duties that are already imposed on imported petroleum);

 

 

     o a tax on both imported and domestically produced crude oil;

 

 

     o a broadly-based or general energy tax on all or most types of

 

       energy consumption, either based on the heat content of the

 

       fuel (Btu tax), the carbon content of the fuel (the carbon

 

       tax) or on the sales price (the ad valorem energy tax).

 

 

Eventually, only the tax on gasoline and other motor fuels was increased (by 5 cents in 1982, 5 cents in 1990, and by 4.3 cents in 1993).

[47] As a general economic principle there is no distinct fiscal rationale for a federal energy tax as a source of general fund financing of federal activities or for deficit reduction. Economic principles suggest federal programs ought to be financed by general income or general consumption taxes. Such taxes, however, while less distortive and more equitable than energy taxes and other selective excise taxes (or differential commodity taxes) are also distortional. Income taxes, for instance, distort the choice between work and leisure by raising the price of work relative to the price of leisure, which tends to increase leisure and reduce work. Income taxes also distort the choice between consuming and saving for the future by raising the price of consuming in the future (i.e., saving). If an efficiency enhancing tax, such as an externality correcting energy tax, could be substituted for a distortional tax in a revenue neutral way, not only would there be no budgetary effect, but there would be a gain in efficiency (e.g., a reduction in pollution to the environment). 15 In some cases, the revenue gain -- hence the possible efficiency gain -- could be substantial. For example, a $30/ton tax on carbon emissions, which would roughly stabilize carbon emissions at their 2000 levels, would generate about $40 billion annually; a $100 per ton tax could generate as much as $100 billion annually. 16

ENERGY TAXES VS. REGULATION TO ACHIEVE ENVIRONMENTAL POLICY GOALS

[48] Energy taxes and subsidies, when used to correct for externalities and other market failures, offer an efficient alternative or supplement to regulations as an instrument of environmental policy. Regulations prescribe the type of technology or equipment for environmental protection, the maximum permitted rate of emission for a particular pollutant, or a minimum energy-efficiency standard, and are part of the "command-and-control" approach to environmental protection. Regulations, such as standards, give policymakers more assurance that environmental policy goals will be achieved regardless of cost, but are often more costly and less economically efficient than taxes or tradeable emissions permits. 17

[49] To illustrate the fundamental reason why a standard would be economically less efficient than the tax, consider a regulation that prescribes that electric utility generators must be at least 45% energy-efficient as a way of conserving energy and reducing powerplant emissions. That is, every fossil-fuel-fired generator in use would have to have an efficiency rate of 45%. In response to the standard, and given current economics of alternative generation strategies, most utilities would invest in the advanced combined- cycle natural gas system (ACCNG), which is the cheapest and most energy efficient technology, with an efficiency rate close to 50%. Subjecting all firms to the same regulatory standard essentially ensures the same behavioral response regardless of differences in the marginal costs of reducing air emissions. But, while the ACCNG system is the least-costly technology among those feasible technologies that meet the 45% energy efficiency standard, it may not be the least-cost energy conservation or air pollution control strategy for every single utility, in every single plant, every single generating unit, and for each of the various emissions.

[50] Intuition suggests, and many studies have confirmed, that the marginal costs of pollution control (marginal abatement costs) vary for each type of pollutant and with the type of technology that utilities use. With the regulation as described, no account would be taken of the differences among utilities, plants, and generating units in their capacity to reduce emissions. Yet, because of differences in location (site characteristics), design, and utilization rate, current generating units differ significantly with respect to the difficulty (or ease) and the cost of reducing emissions. As a result, those firms with the greater pollution abatement costs would have to undertake the same level of abatement as those with lower marginal abatement costs.

[51] Because of these cost differences, there are many different strategies and options that utilities might use to reduce exhaust emissions from power plants. For example, some utilities might just reduce output, others might invest in pollution control equipment, and still others might replace their coal-fired units with advanced technologies. If there are enough differences among utilities and their marginal abatement costs, then the total costs of reducing emissions with the regulatory standard would be greater (less efficient) than any of the market-based approaches.

[52] In contrast, a tax would provide the incentive for each polluter to reduce pollution in the least costly way -- up to the point at which the tax just equals the marginal abatement costs. In the above illustration, the utility with the lower marginal abatement costs of reducing pollution would undertake more pollution abatement than the utility with higher marginal abatement costs. In that way the total cost of abatement would be minimized. Tax revenues could be used to compensate the parties that are harmed by the emissions. The total costs of emissions control from utilities would be much lower if utilities were permitted to use various technologies and control options that are the least cost for that particular utility, that particular plant, and that particular generating unit, to address different emissions, which is how a tax would work. By using a tax instead of a standard, all those anti-pollution activities that cost less than the tax will be undertaken.

TAXES OR TRADEABLE EMISSIONS PERMITS

[53] An alternative market-based approach for environmental protection -- an efficient alternative to emissions taxes or their practical equivalent: energy taxes -- is the tradeable emission permit or allowance, also known as "pollution rights," "cap-and- trade," or marketable pollution permits. Under this approach, the government (the Congress and the environmental authorities) requires each emitter of a particular pollutant to have a legal permit to emit a fixed amount of that pollutant. The authorities establish a target level for aggregate emissions of a particular pollutant (say so many hundreds of thousand of tons per year), and the pollution equivalence of the tradeable permits (one permit equals one ton of X pollutant). It also allows these permits to be traded in the marketplace among source emitters (or among anyone), who can either buy and use them (if the costs of a permit are less then than the marginal abatement costs), save them for future use (if they expect marginal abatement costs to rise above the cost of each permit) or sell them (if their marginal abatement costs per ton are less than the price of a permit). The idea underlying this approach is that it achieves any given level of pollution at lower costs, and is thus economically efficient. Those firms with relatively low marginal abatement costs will choose abatement over permits; those with relatively high abatement costs will choose to purchase permits rather than control pollution. The aggregate level of pollution is fixed, however.

[54] While in theory allowances are equivalent to an emissions tax -- and thus also more efficient than standards -- in practice there are differences that may make tradeable permits generally more appealing to the policymaker in certain situations while the emissions tax approach is more appealing in others. 18 First, tradeable permits fix the level of aggregate pollution and let the price adjust, whereas the tax fixes the price (the statutory tax rate per unit) and lets the quantity of pollutant (or its equivalent amount of energy) adjust. Thus, tradeable permits appear to give the authorities greater certainty of control over the level of pollution, and therefore control over air and water quality. Tradable permits are considered by many a superior instrument when pollution is reaching some critical level and the government needs to control the quantity of the emissions. Another advantage of tradeable permits is that they avoid the information problem associated with emissions taxes, which would require authorities to know both the marginal external costs (the monetary value of the damages) and the marginal abatement costs per unit of pollution. This information, none of which is required with tradeable permits, is difficult and costly to estimate and in some cases not available at all. None of this is required with tradeable permits. Finally, taxes may be eroded by inflation and affected by the entry and exit of firms. This is not a problem for tradeable permits.

[55] Under a tradeable permit system the authorities must establish a system for monitoring the emissions of the polluter. This is relatively simple when the number of polluters is relatively small in relationship to the magnitude of the emissions, which is the case with SO [sulphur dioxide] emitted by electric utilities. As the number of polluters increases the complexity of emissions monitoring and program administration increases exponentially, which raises the transactions costs of the permit system to such levels that it would no longer make tradeable permits efficient. Such is the case with [carbon dioxide] emissions which have millions of sources. In such a case an emissions tax is more appealing.

[56] The economic efficiency advantages of market based approaches to environmental protection are suggested by the documented evidence on the success of the tradeable permit system -- mandated by title IV of the Clean Air Act -- in controlling emissions of sulfur dioxide (SO[sub 2]) by electric utilities while lowering compliance costs as compared to initial or regulatory costs. 19 According to the Environmental Protection Agency:

     Both the Acid Rain Program's rate-based approach to NO[subx]

 

     reduction and cap-and-trade approach to SO[sub2] reduction have

 

     been very successful. 20

 

 

Tradable permits are also being discussed as an instrument of

 

controlling greenhouse gases worldwide, part of an international

 

framework to control emissions of CO[sub 2], NO[sub x], and other

 

greenhouse gases. 21

 

 

THE ECONOMIC EFFECTS OF ENERGY TAXES

[57] The level of, and changes to, energy taxes and subsidies can affect energy prices and output, economic growth rates, income distribution, and international trade. Thus, they can be a very powerful energy and economic policy instrument.

EFFICIENCY EFFECTS

[58] As was discussed above, energy taxes and subsidies can be a useful instrument to correct for pre-existing distortions in the allocation of resources and simultaneously generate tax revenues, if they are imposed on activities or commodities such as energy resources whose production and use generate external costs, or if they are imposed as user fees for the services of a public good. Otherwise, selective energy excise taxes for either greater production, improved technical energy efficiency, or increased supply of alternative fuels reduce the efficiency of the economy. Reduced efficiency implies reduced output and lower standards of living.

DISTRIBUTIONAL EFFECTS

[59] With respect to energy taxes on supply, there is generally no separate equity case that can be made for taxing energy at a higher rate than other commodities. Due to nonrenewable resources' finite stock, economic rents (also called scarcity refits) are created when these resources are produced. Under competitive conditions such rents would be expected to rise at the rate of interest so as to achieve asset or capital market equilibrium. Such rents are not excessive under competitive supply and need not be taxed away on equity grounds. 22 Energy taxes on consumers (e.g., gasoline taxes, oil taxes, or general energy taxes) also frequently have negative distributional consequences because the incidence of such taxes frequently falls disproportionately on lower incomes. Finally, energy tax subsidies frequently also have adverse distributional effects. One example -- there are others -- is the income tax credit (the section 29 tax credit) for non-conventional energy resources, which in addition to distorting resource allocation, losing tax revenues, and not reducing import dependence (since it basically increases the supply of methane gas rather than alternatives to petroleum) is also questionable on tax equity grounds.

MACROECONOMIC EFFECTS

[60] Increases in energy taxes are basically a contractionary fiscal policy that would tend to reduce aggregate output and employment, and produce a temporary increase in the rate of inflation above the baseline. Increases in taxes on final energy demand, such as a hike in the gasoline tax, tend to be (dollar for dollar) less contractionary than energy taxes on industry (such as an oil tax) although these, too, reduce household income, consumer spending, and to some extent business costs and profits. Sizeable taxes on oil increase the price of all energy and can trigger relatively large cutbacks in industrial energy use and energy used as inputs into production. Such taxes, such as an oil import tax, can produce macroeconomic effects akin to an oil price shock, resulting in a temporary but sharp slowdown in the economy's growth.

 

FOOTNOTES

 

 

1 See e.g., U.S. Congress. Senate. Tax Expenditures: Compendium of Background Material on Individual Provisions. Committee on the Budget. Committee Print. 105th Congress, 2nd Session. U.S. Government. Printing Office Washington, 1998. Pp. 53-68.

2 While there may be other factors that policymakers find compelling, this report addresses those problems and solutions grounded in economic efficiency.

3 CO [sub] 2 (linked to possible global warming), SO [sub] 2 (linked to acid deposition, which is harmful to rivers, streams, wildlife, and infrastructure), NO [sub] x (linked to acid rain, and an ozone precursor, which when it reacts with volatile organic compounds creates smog, which is linked to lung and other health problems ), and mercury contamination (that pollutes lakes rivers, and streams, and harms wildlife).

4 Barthold, Thomas A. Issues in the Design of Environmental Taxes. Journal of Economic Perspectives, v. 8, Winter, 1994. Pp. 133- 151.

5 The excise tax on ozone-depleting chemicals was part of the Revenue Reconciliation Act of 1989. It was enacted primarily to meet the U.S. obligations under the Montreal Protocol of 1987, which required the 162 signatories to reduce production and consumption of substances that deplete the ozone layer. The United States ratified the treaty in 1988, and it went into effect in 1989. Since the tax raises revenues, it was also viewed, during the heated 1989 debates over budget reconciliation, as an option for reducing the persistent and large: federal budget deficits.

6 Renewable resources are generally thought to be less polluting than conventional fossil fuels, but they can also harm the environment and are not pollution free. Hydroelectric power affects wildlife habitats, as do wind farms. The combustion of biomass fuels generates air emissions. The negative externalities engendered by the use of renewables would also have to [be] taxed, in theory.

7 The current excise taxes on gasoline, diesel, and most other motor fuels include only the user charge components and the 0.1 cent Leaking Underground Storage Tank (LUST) fund components. For example, the 18.4 cent/gal tax on gasoline consists of the 18.3 user charge that goes into the highway trust fund, and the 0.01 cent that goes into the LUST trust fund. Thus, there is no externality component on these fuels to correct for the cost imposed on society from the harm caused by emissions from the combustion of the fuels. There are three exceptions: 4.3 cents of the taxes on diesel used by railroads and by boats on inland waterways, and 6.8 cents of the tax on gasoline used by recreational motorboats, goes into the general fund of the U.S. Treasury, which might be thought of as externality taxes. On the various components of these taxes by fuel type, as well as the total tax rate per gallon by fuel type, see: U.S. Library of Congress. Congressional Research Service. Transportation Fuel Taxes and Legislative Issues. CRS Report RS20281 by Bernard A. Gelb, October 6, 1999.

8 U.S. Library of Congress. Congressional Research Service. Oil Imports: An Overview and Update of Economic and Security Effects. CRS Report 98-1, by John L. Moore, Carl E. Behrens, and John Blodgett. December 12, 1997.

9 If G is the gasoline tax rate, and MPG is automobile fuel efficiency in miles per gallon, then the COST/MILE = G/MPG. So that if G = 18.4 cents/gal. and MPG = 30, then the tax cost per mile is 18.4/30 = 0.613 cents/mile.

10 Technical change and recycling can offset the depletion effect of resource exhaustion.

11 Energy efficiency, an engineering concept or measure that has little in common with economic efficiency, basically measures the energy/output ratio -- the amount of energy input required to generate one unit of output. For example, the average thermal efficiency of coal-fired steam generators is about 34%, which means that it takes an average of 100 Btu's of fuel to generate an average of 34 Btu's of electricity (64% of the energy from the fuel is lost or "wasted").

12 Levelized costs converts a series of nonuniform costs over time into an average annual cost over that time period.

13 For the cost of the advanced combined-cycle (and other coal technology options) options see: U.S. Library of Congress. Congressional Research Service. Electricity Restructuring: Implications for Air Quality. CRS Report 98-615, July 10, 1998, by Larry Parker. The estimates for renewables are from: Hansen, Ulf. Technological Options for Power Generation. The Energy Journal, v. 19, 1998, table 3.

14 See: U.S. Library of Congress. Congressional Research Service. Energy Tax Subsidies: Biomass vs. Oil and Gas. CRS Report 93-19, by Salvatore Lazzari, January 5, 1993.

15 Some label the environmental gains and the efficiency gains from green taxes as the "double dividend," but it is really the same effect.

16 Revenue estimates run at about $1/ton of [carbon dioxide], at least for relatively small taxes per ton. See: U.S. Congressional Budget Office. Reducing the Deficit: Spending and Revenue Options. March, 1997. P. 392; U.S. Library of Congress. Congressional Research Service. Carbon Taxes: Cost-Effective Environmental Control or Just Another Tax? CRS Report 92-623, by Larry B. Parker, June, 1992. P. 15; and U.S. Congressional Budget Office. Carbon Charges As A Response to Global Warming: the Effects of Taxing Fossil Fuels. August, 1990. P. 21

17 For a discussion of such market based instruments, including their economic efficiency, in the context of the global climate change problem, see: U.S. Library of Congress. Congressional Research Service. Global Climate Change: Market-Based Strategies to Reduce Greenhouse Gases. Issue Brief 97057, by Larry Parker. December 1, 1999 (Updated Regularly).

18 See Pearce, David W. and R. Kerry Turner. Economics of Natural Resources and the Environment. (The Johns Hopkins University Press, Baltimore, 1990), p. 92.

19 Joskow, Paul L., Richard Schmalensee, and Elizabeth M. Bailey. The Market for Sulfur Dioxide Emissions. American Economic Review, September, 1998. Pp. 669-685 See also, Schmalensee, Richard, Paul L. Joskow, A [sic] Denny Ellerman, Juan Pablo Montero, and Elizabeth M. Bailey. An Interim Evaluation of Sulfur Dioxide Emissions Trading. Journal of Economic Perspectives. V. 12, Summer 1998. Pp. 53-68; and Zipper, Carl E. and Leonard Gilroy. Sulfur Dioxide Emissions and Market Effects Under the Clean Air Act Acid Rain Program. Journal of Air & Waste Management Association, Vol. 48, September, 1998, pp. 829-837.

20 U.S. Environmental Protection Agency. 1997 Compliance Report: Acid Rain Program. EPA-430-R-98-012, August, 1998, p. 22.

21 U.S. Library of Congress. Congressional Research Service. Global Climate Change: Market-Based Strategies to Reduce Greenhouse Gases. CRS Issue Brief 97057, by Larry Parker. October 6, 1999 (Updated regularly).

22 The existence of a successful cartel or some other force or factor that inhibits competition might generate substantial economic rents, particularly for low cost producers. For example, clearly Saudi Arabia and other Persian Gulf producers earn substantial economic rents from their oil production as it costs only a few dollars per barrel (average production costs of Saudi oil have estimated at about $1.50/barrel) to produce oil. However, U.S. oil producers are basically the high cost or marginal producers from the perspective of the world crude oil market and do not generally earn such high rents. In any event, as noted before, the world crude oil market is much more competitive today than at any time during the last 30 years; it is thought that even OPEC cannot establish, for sustained periods of time, crude oil prices above competitive equilibrium levels.

 

END OF FOOTNOTES
DOCUMENT ATTRIBUTES
  • Authors
    Lazzari, Salvatore
  • Institutional Authors
    Congressional Research Service
  • Subject Area/Tax Topics
  • Index Terms
    legislation, tax
    budget, federal
    tax policy, energy
    tax policy, energy, oil and gas
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2000-3773 (22 original pages)
  • Tax Analysts Electronic Citation
    2000 TNT 26-38
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