An energy tax is a
tax
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
that increases the price of
energy (Fisher ''et al''., 1996, p. 416). Arguments in favour of energy taxes have included the pursuit of
macroeconomic objectives, e.g.,
fiscal deficit
The government budget balance, also alternatively referred to as general government balance, public budget balance, or public fiscal balance, is the overall difference between government revenues and spending. A positive balance is called a ''g ...
reduction in the 1990s, as well as environmental benefits, i.e., reduced pollution (Nellor, 1994, p. 1). A weakness of energy taxes is that they impose a burden (or cost) in the form of reduced economic output and employment (p. 19).
United States
In 1993, then President
Bill Clinton proposed a
BTU tax. A BTU tax is a type of energy tax (Baron, 1997, p. 14). The tax would have taxed all fuel sources based on their heat content except for wind, solar, and geothermal. It was never adopted. The BTU tax passed the House, but was rejected by the Senate in light of the lobbying effort mobilized against its adoption. The rejected proposal was watered down, as the Clinton administration tried to salvage their efforts by offering to exempt manufacturers and base the tax on the cost rather than the heat content of energy. Many of the House Democrats who voted for the tax and who lost their seats in the 1994 midterm election, blamed their loss on their vote for the BTU tax. Getting "BTU'd" became Beltway slang at the time for those who lost reelection by voting for the controversial proposal.
Colorado
On 7 November 2006, citizens of
Boulder, Colorado
Boulder is a home rule city that is the county seat and most populous municipality of Boulder County, Colorado, United States. The city population was 108,250 at the 2020 United States census, making it the 12th most populous city in Color ...
(a city with roughly 100,000 residents situated in the foothills of the Rocky Mtns) voted in favor of initiative 202, the
Boulder Climate Action Plan
The Climate Action Plan (CAP) in Boulder, Colorado is a set of strategies intended to guide community efforts for reducing greenhouse gas emissions. These strategies have focused on improving energy efficiency and conservation in homes and busine ...
Tax. That marks the first time in the nation that a municipal government has imposed an energy tax directly upon its residents to combat global warming. It applies to energy consumption with deductions for carbon-neutral and renewable energy sources (such as
Xcel Energy’s WindSource).
The tax appears on consumer's energy bills and is used to fund the city’s Office of Environmental Affairs that is in charge of programs designed to reduce Boulder's
carbon footprint
A carbon footprint is the total greenhouse gas (GHG) emissions caused by an individual, event, organization, service, place or product, expressed as carbon dioxide equivalent (CO2e). Greenhouse gases, including the carbon-containing gases carbo ...
.
The CAP tax is to generate roughly $1 million annually. The City Council has the authority to increase the rates as needed. As of October 2009, the rate is assigned as follows:
See also
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Carbon fee and dividend
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Carbon tax
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Ecotax
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Energy Tax Act of 1978
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Energy Policy Act of 2005
The Energy Policy Act of 2005 () is a federal law signed by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico. The act, described by proponents as an attempt to combat growing energy problems ...
*
Fuel economy in automobiles
The fuel economy of an automobile relates distance traveled by a vehicle and the amount of fuel consumed. Consumption can be expressed in terms of volume of fuel to travel a distance, or the distance traveled per unit volume of fuel consumed. S ...
*
H.R. 1424
References
{{DEFAULTSORT:Energy Tax
Energy policy
Environmental tax