ABSTRACT
This chapter considers a variety of proposed policies intended to use taxes and markets to raise revenues and change energy-related behaviors. The federal government has a number of fees and taxes on energy. Energy excise taxes are collected per unit, rather than ad valorem taxes, which are a percentage of the value of the item. The higher taxes on diesel in the United States are intended to provide a differential “charge” to diesel trucks, which cause a disproportionate share of the wear and tear on US highways. Tolls are regressive, and while common in the eastern United States, remain rare west of the Mississippi. The likelihood of gas or driving taxes being implemented appears low. Fuels with relatively higher emissions per British thermal units will face a higher tax; this means that coal will be taxed more highly than petroleum or natural gas.
