Energy tax
Encyclopedia
An energy tax is a tax
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 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).
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.
Tax. This marks the first time in the nation that a municipal government has imposed an energy tax directly upon it’s residents to combat global warming. The CAP tax 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 which, is in charge of programs designed to reduce Boulders carbon footprint
.
The CAP tax will 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:
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...
that increases the price of energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
(Fisher et al., 1996, p. 416). Arguments in favour of energy taxes have included the pursuit of macroeconomic objectives, e.g., fiscal deficit 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 ClintonBill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
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 (a college town with roughly 100,000 residents situated in the foothills of the Rocky Mtns) voted in favor of initiative 202, the Climate Action PlanClimate Action Plan
Climate Action PlanThe Climate Action Plan is a set of strategies intended to guide community efforts for reducing greenhouse gas emissions. Those strategies have focused on improving energy efficiency and conservation in our homes and businesses—the source of nearly three-fourths of local...
Tax. This marks the first time in the nation that a municipal government has imposed an energy tax directly upon it’s residents to combat global warming. The CAP tax applies to energy consumption with deductions for carbon-neutral and renewable energy sources (such as Xcel Energy
Xcel Energy
Xcel Energy, Inc. is a public utility company based in Minneapolis, Minnesota, serving customers in Colorado, Michigan, Minnesota, New Mexico, North Dakota, South Dakota, Texas, and Wisconsin. Primary services are electricity and natural gas...
’s WindSource). The tax appears on consumer’s energy bills, and is used to fund the city’s Office of Environmental Affairs which, is in charge of programs designed to reduce Boulders carbon footprint
Carbon footprint
A carbon footprint has historically been defined as "the total set of greenhouse gas emissions caused by an organization, event, product or person.". However, calculating a carbon footprint which conforms to this definition is often impracticable due to the large amount of data required, which is...
.
The CAP tax will 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:
| Electricity User Type | Tax Rate | Average Annual Tax |
|---|---|---|
| Residential | $0.0049/kWh | $21 |
| Commercial | $0.0009/kWh | $94 |
| Industrial | $0.0003/kWh | $9,600 |
See also
- Carbon taxCarbon taxA carbon tax is an environmental tax levied on the carbon content of fuels. It is a form of carbon pricing. Carbon is present in every hydrocarbon fuel and is released as carbon dioxide when they are burnt. In contrast, non-combustion energy sources—wind, sunlight, hydropower, and nuclear—do not...
- EcotaxEcotaxEcotax refers to taxes intended to promote ecologically sustainable activities via economic incentives. Such a policy can complement or avert the need for regulatory approaches. Often, an ecotax policy proposal may attempt to maintain overall tax revenue by proportionately reducing other taxes...
- Energy Tax ActEnergy Tax ActThe Energy Tax Act is a law passed by the U.S. Congress as part of the National Energy Act. The objective of this law was shift from oil and gas supply toward energy conservation; thus, to promote fuel efficiency and renewable energy through taxes and tax credits.- Tax credits for conservation...
of 1978 - Energy Policy Act of 2005Energy Policy Act of 2005The Energy Policy Act of 2005 is a bill passed by the United States Congress on July 29, 2005, and signed into law by President George W. Bush on August 8, 2005, at Sandia National Laboratories in Albuquerque, New Mexico...
- Fee and dividendFee and dividendFee and dividend is a revenue-neutral mechanism designed to impose a progressive fee on carbon emissions and return the fee to the public, which has been proposed as an alternative method of reduction in fossil fuel use to cap and trade and emissions trading mechanisms...
- Fuel economy in automobilesFuel economy in automobilesFuel usage in automobiles refers to the fuel efficiency relationship between distance traveled by an automobile and the amount of fuel consumed....
- H.R. 1424