Energy Tax

AAA

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.

INVESTOPEDIA EXPLAINS '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. Earn A Holiday Bonus Through Energy ...
    Budgeting

    Earn A Holiday Bonus Through Energy ...

  2. Investing In Oil And Gas UITs
    Mutual Funds & ETFs

    Investing In Oil And Gas UITs

  3. 10 Ways To Save Energy And Money
    Personal Finance

    10 Ways To Save Energy And Money

  4. A Guide To Investing In Oil Markets
    Options & Futures

    A Guide To Investing In Oil Markets

Hot Definitions
  1. Return On Sales - ROS

    A ratio widely used to evaluate a company's operational efficiency. ROS is also known as a firm's "operating profit margin". ...
  2. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  3. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  4. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  5. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  6. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
Trading Center