Energy Tax Policy

The federal tax code includes billions of dollars in annual subsidies for the energy sector, delivered through tax credits and preferential treatments that allow companies to significantly lower their effective tax rates. Many of these incentives work at cross purposes, subsidizing activities that are inefficient, distort markets, or increase pollution. Greater oversight, accountability, and transparency are needed to ensure these tax credits don’t cost taxpayers more they are worth. Cutting unnecessary, duplicative, or harmful energy tax subsidies would not only reduce the deficit and future liabilities—it could also help the U.S. meet its energy goals more efficiently.