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Energy Tax Preferences: Rid Them All (Cato letter to House working group revisited)

By Robert Bradley Jr. -- July 29, 2013

Some might argue that some existing preferences increase energy production and thus, contribute to lower energy prices. Yet many of the preferences at issue have little or no impact on energy production; they simply represent wealth transfers.

Those preferences that do reduce energy production costs simply encourage market actors to produce costly, economically uncompetitive energy. Markets are not made more efficient by producing costly relative to less costly energy.”

Earlier this year, Jerry Taylor and Peter Van Doren of the Cato Institute wrote a tax policy missive to the Energy Tax Reform Working Group of the  House Ways and Means Committee. This committee, chaired by Kevin Brady (R-Texas), is one of eleven such working groups chaired by Dave Camp (R-MI) and Ranking Member Sandy Levin (D-MI).

Taylor and Van Doren espouse cleaning out the tax code to allow a more neutral tax structure to determine the production and consumption of competing energies.