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:1. large revenue losses associated with the oil and gas tax preferences, :2. heightened awareness of environmental pollution and concern for environmental degradation, as well as :3. the Oil Embargo Of 1973 (also known as the first oil shock) and the Iranian Revolution in 1979. Lazzari, Salvatore; "Energy Tax Policy", Congressional Research Service of The Library of Congress, Updated April 22, 2005; page 6 The objective of this law was shift from oil and gas supply toward energy conservation; thus, to promote Fuel Efficiency and Renewable Energy through Tax es and Tax Credit s. Lazzari, Salvatore; "Energy Tax Policy", Congressional Research Service of The Library of Congress, Updated April 22, 2005; page 6 TAX CREDITS FOR CONSERVATION This law gave an Income Tax credit to private residents who use Solar , Wind , or Geothermal sources of energy. The credit is equal to 30% of the cost of the equipment up to $2000, as well as 20% of costs greater than $2000, up to a maximum of $10,000. There were also tax credits to businesses for renewable energy equipment, amounting to a maximum of 25% of the cost of the equipment. The renewable energy credits of this law were increased by the Crude Oil Windfall Profits Tax Act of 1980. GAS GUZZLER TAX The Act also created the ''gas guzzler tax''[http://www.fueleconomy.gov/feg/info.shtml#guzzler fueleconomy.gov} which applies to the sales of vehicles with official EPA-estimated Gas Mileage below certain specified levels. In 1980, the tax was $200 for a fuel efficiency of 14 to 15 Miles Per Gallon , and was increased to $1800 in 1985 . In 1980, the tax was $550 for fuel efficiencies of 13 mpg and below, and was changed in 1986 to $3,850 for ratings below 12.5 mpg. The Gas Guzzler tax only applied to cars under 6,000 pounds, which made SUV s and other large Passenger Cars exempt from this tax, thus increasing the latter's popularity. Many argue that the 6,000 pound limit is actually counter-productive to the purpose of the Gas Guzzler tax by encouraging the use of large SUVs that avoid the tax due to their high weight. The following chart shows the tax for various levels of MPG as of 2006. The combined fuel economy MPG value (55% city, 45% highway) is used to determine tax liability. The MPG value is also adjusted slightly to account for differences in test procedures made since the base year, but it is not adjusted for in-use short fall. The unadjusted combined MPG of a vehicle can be approximated from the city and highway values provided in the ''Fuel Economy Guide'' by the following equation: : Since this is an approximate calculation, the actual gas guzzler tax may be off by one tax bracket. SEE ALSO NOTES EXTERNAL LINKS
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