Skip to content

Talking Tax Reform: The Future of Energy Tax Policy

Over the past decades, the U.S. government utilized a familiar playbook to promote green energy: tax incentives and regulations. The Inflation Reduction Act fits within this playbook, expanding green energy tax incentives by $300 billion over the next 10 years, mostly through existing provisions. Supporters hail these provisions as a historic investment in green energy, while critics claim it will do little to support an industry that has matured past subsidies.

Much has changed in the energy sector as new technologies have come online and older tech has become more economically viable. Several policies could supplement the existing policy toolkit or provide alternatives to limit carbon emissions at a reduced cost to the economy. A carbon tax, for example, is a technologically neutral policy (i.e., it avoids distorting business decisions and slowing economic growth) that could complement our current energy strategy and provide revenue for the government but has yet to see substantial political support.

Outside of energy-specific policies, there are broad reforms to the tax code that could make it more friendly to investment, including capital-intensive wind, solar, and nuclear energy production. Further, the U.S. capital stock is aging; improving the treatment of new capital would drive more energy-efficient investment.      

On Thursday, September 22nd at 11:00 a.m. EST, the Tax Foundation will host a panel discussion on the impact of the Inflation Reduction Act, carbon taxes, and the future of energy tax policy. Our panel of tax and energy experts will focus on these questions:

  • What are the green energy provisions in the Inflation Reduction Act and how will they impact investment in green energy?
  • What are the benefits and challenges associated with the current approach to green energy tax policy?
  • How effective has the current approach been at reducing carbon emissions compared to its economic and budgetary costs?
  • Which technologically neutral energy policies could policymakers consider to reduce carbon emissions?
  • Are there reforms to the tax code at large that could encourage investment in green energy and energy efficiency?

Our moderator, Will McBride, Vice President of Federal Tax Policy & Stephen J. Entin Fellow in Economics at the Tax Foundation, will guide the discussion between our two panelists:

Please register below if you plan to attend.