Show simple item record

dc.contributor.authorBarbe, Andre J.
dc.date.accessioned 2016-08-23T21:23:21Z
dc.date.available 2016-08-23T21:23:21Z
dc.date.issued 2013
dc.identifier.citation Barbe, Andre J.. "Fossil Fuel Taxation in the President's 2013 Budget." (2013) James A. Baker III Institute for Public Policy of Rice University: http://bakerinstitute.org/research/fossil-fuel-taxation-in-the-presidents-2013-budget/.
dc.identifier.urihttps://hdl.handle.net/1911/91320
dc.description.abstract The president’s Fiscal Year 2013 budget proposes changes to the taxation of fossil fuels by increasing tax rates, reinstating expired taxes, and eliminating deductions for their production. The stated rationale for these changes is to remove tax preferences that encourage more investment in fossil fuel production than would occur under a neutral tax system. In this paper we evaluate if the proposal accomplishes this goal. We do so by looking at the neutrality of the individual changes proposed, the overall tax treatment of fossil fuel production, and the effect the proposal will have on fossil fuel production. We first identify the changes proposed in the budget and compare them to both current law and a neutral tax system. We find that some of the proposed changes increase the neutrality of the system while others decrease it. We then move to look at the overall tax treatment of fossil fuel production in order to determine if the tax code gives preferential treatment to fossil fuel production. Surveying past literature on the effective tax rate on capital shows a wide variety of estimated tax rates for the sector. We calculate our own measures of the effective tax rate for the sector using three different specifications. Under all three of our measures, the effective tax rate for fossil fuel production is higher than the average for other sectors. Finally, we predict the effect of the proposal on fossil fuel production using a general equilibrium model of the US economy. We find that the proposal would increase the price of fossil fuels between 1.8 and 2.7 percent and decrease demand for fossil fuels between 0.7 and 1.7 percent, and that the excess burden of the additional revenue is 60 percent of revenues higher than if the tax was spread over all sectors.
dc.language.iso eng
dc.publisher James A. Baker III Institute for Public Policy of Rice University
dc.relation.urihttp://bakerinstitute.org/research/fossil-fuel-taxation-in-the-presidents-2013-budget/
dc.title Fossil Fuel Taxation in the President's 2013 Budget
dc.type Research paper
dc.type.dcmi Text


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record