Congress has spent much of this year debating budget matters and the fate of the nation’s tax policy. A central theme of any tax policy debate raised by just about everyone is “market certainty.” The fact is that for the past 100 years “certainty” in our energy tax code has meant directly subsidizing the fossil fuel industry’s ability to pollute.
The truth is that “certainty”—at least how it is conventionally defined in economic circles—cannot be the only factor in judging policy choices. There is much more at stake and we can’t let the tedium and obscurity of the tax code mask the fundamental ethical questions that lie beneath the code. Our tax code reflects our social priorities and values, though often refracted through the fun house mirror of political logic: the very obscurity of the issues used to distort the real motivations and consequences of the decisions being made.
As Congress debates the future of American tax policy, both those distortions and fundamental questions are coming into rare focus—and are particularly acute when it comes to how the tax code shapes our nation’s energy and environmental policy. In order to responsibly deploy tax policy as a tool to address society’s evolving needs, decision makers would be advantaged by employing a more expansive definition of certainty that confronts the deeper question of what type of future we are shaping for the next generation
Immediately at stake are a host of important tax provisions that support the clean energy economy which are set to expire at the end of this year if Congress does not take action. With precious little time left before the end of the year our elected leaders will have to make a choice whether to continue the status quo or chart a new course that stops privileging these established, polluting industries over cleaner, healthier alternatives.