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Thursday, January 21, 2010

CRS Issue Statement on Energy Taxation

Molly F. Sherlock,
Analyst in Economics

Concerns over global climate change and energy security have led to sustained Congressional interest in energy tax policy. This interest is expected to continue in the second session of the 111th Congress. Constraining the options for addressing these issues are substantial budget deficits, which may spur Congress to consider revenue neutral or revenue raising policies while debating energy tax policy initiatives. 

Options for addressing global climate change examined during the first session are likely to be revisited during the second session. The probable starting point for this debate will be further work on cap-and-trade legislation (H.R. 2454, S. 1462) considered during the first session of the 111th Congress. Using market-based mechanisms, such as cap-and-trade programs or a carbon tax, to control CO2 emissions will remain part of the discussion. Given the uncertainty surrounding the state of the U.S. economy and the economic recovery, Congress may want to evaluate the economic impact that a cap-and-trade program could have on growth, industry and business development, and low-income individuals.

Date of Report: January 13, 2010
Number of Pages: 3
Order Number: IS41026
Price: $7.95

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