Energy Tax

DEFINITION of 'Energy Tax'

A surcharge on fossil fuels such as oil, coal and natural gas. The purpose of an energy tax is to give businesses and consumers an incentive to use alternative energy sources, such as solar and wind power, and to raise revenue for the government in order to finance public spending. Some environmentalists believe energy taxes are necessary to reduce the greenhouse gas emissions that are theorized to cause global warming. Opponents of energy taxes warn of their unintended consequences, like an increase in the price of virtually everything that will reduce individuals' and families' disposable income.

BREAKING DOWN 'Energy Tax'

Energy taxes can exist in a number of forms, from regulations that require automakers to reduce cars' carbon dioxide emissions to surcharges on electricity bills. President Obama's fiscal year 2010 budget included a cap-and-trade energy tax.

RELATED TERMS
  1. Tony Earley Jr.

    The chairman and CEO of Detroit-based energy company DTE Energy ...
  2. Federal Energy Regulatory Commission ...

    An independent agency responsible for regulating interstate oil ...
  3. Fuel Tax Credit

    A federal subsidy that allows businesses to reduce their taxable ...
  4. Energy Tax Credit

    An energy tax credit is given to homeowners who make their homes ...
  5. Alternative Fuels Tax Credit

    A non-refundable tax credit awarded to taxpayers who use non-alcohol ...
  6. Energy Sector

    A category of stocks that relate to producing or supplying energy. ...
Related Articles
  1. Budgeting

    These Energy Saving Tips Are Like A Holiday Bonus

    You can enjoy the festive season without a jolly increase in your energy costs. We'll show you how.
  2. Mutual Funds & ETFs

    Investing In Oil And Gas UITs

    Unit investment trusts provide direct exposure to the energy sector, fueling better returns.
  3. Personal Finance

    10 Ways To Save Energy And Money

    The average family spends $1,600/year on utility bills - find out how to put some of that back in your wallet.
  4. Options & Futures

    A Guide To Investing In Oil Markets

    Find out how to take advantage of this market without having to open a futures account.
  5. Options & Futures

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  6. Taxes

    5 Tax Credits You Shouldn't Miss

    If you're not taking advantage of these deductions, you could be missing out on tax savings.
  7. Personal Finance

    Ways To Slash Your Home Energy Bill

    Upgrading household appliances to more energy-efficient models can slash your utilities bill.
  8. Investing News

    The 10 Fastest Growing Green Startups in 2016

    These social entrepreneurs adopt triple bottom lines that champion urgent environmental problems while generating returns for shareholders.
  9. Products and Investments

    How Global Warming Could Sink Your Savings

    There's evidence that climate change could impact the global economy and your portfolio. Here's how to protect yourself.
  10. Stock Analysis

    The Top 5 Alternative Energy Stocks for 2016 (FSLR, CSIQ)

    Check out the top five alternative energy stocks for 2016 that are poised to rise because of the investment tax credit and the production tax credit extensions.
RELATED FAQS
  1. Is the high cost of installing solar panels justified by the money saved by going ...

    In favorable locations and under suitable conditions, homeowners can recuperate the cost of installing solar panels. The ... Read Full Answer >>
  2. If my home runs power off the grid, what is the specific environmental impact?

    Running a solar-powered home with energy that is natural or off the grid has several environmental benefits. By using solar ... Read Full Answer >>
  3. What businesses would benefit from more people going off the energy grid?

    Companies that stand to benefit from a shift to off-the-grid living include those that sell alternative energy materials, ... Read Full Answer >>
  4. How can I make my home run on energy that is 100% off the grid?

    Taking your home off the grid can be an exciting process that results in money saved annually and a sense of accomplishment ... Read Full Answer >>
  5. What does greenwashing mean?

    The term "greenwashing" was added to the Oxford English dictionary in 1999, where it is defined as "disinformation disseminated ... Read Full Answer >>
  6. What is the carbon trade?

    The carbon trade came about in response to the Kyoto Protocol. Signed in Kyoto, Japan, by some 180 countries in December ... Read Full Answer >>
Hot Definitions
  1. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  2. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  3. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  4. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  5. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center