28 CLIMATE CHANGE AND THE FEDERAL BUDGET TABLE 8. August 1998 ESTIMATES OF RECEIPTS FROM EXCISE TAXES AND FEES THAT MAY a. Congressional Budget Office Projections reflect modifications in the rules governing deposits Taxes imposed on gasoline, diesel fuel, special motor fuels, and kerosene that would otherwise be deposited with the Treasury after July 31, 1998, and before September 20, 1998, are not required to be deposited until October 5, 1998. The same rule modifications apply to air cargo taxes. In addition, deposits of air passenger taxes normally due after August 14, 1998, and before October 1, 1998, are now due on October 5, 1998. to transportation, with smaller amounts going to nature conservation and environmental cleanup. The Land and Water Conservation Trust Fund accumulates roughly $1 million per year from oil and gas leases. The only excise taxes not dedicated to trust or special funds and designed solely to discourage consumption of products that are detrimental to the environment (as opposed to paying for cleanup after damage has occurred) are taxes on cars that do not achieve specified fuel economy ratings and on ozone-depleting chemicals. Those taxes raise nominal amounts of revenue compared with the trust fund taxes. Highway Trust Fund. Several excise taxes finance the Highway Trust Fund, which was established under the Federal-Aid Highway Act of 1956. The primary sources of revenue are a tax of 18.3 cents per gallon levied on gasoline, a tax of 24.3 cents per gallon on diesel fuel, and taxes on gasohol and other special fuels. Other trust fund taxes are levied on sales of tires, inner tubes, trucks, tractors, and trailers. In addition, annual use taxes are levied on trucks weighing more than 55,000 pounds. Of the total taxes on gasoline, 1.5 cents per gallon is dedicated to a special mass transit account, which may be used for capital and related expenditures. The taxes dedicated to the Highway Trust Fund were scheduled to expire on September 30, 1999, with the exception of a motor fuels excise tax of 4.3 cents per gallon. The Transportation Equity Act of 1998 extended them through 2005. Airport and Airway Trust Fund. Taxes on air passenger tickets, air cargo, 30 CLIMATE CHANGE AND THE FEDERAL BUDGET August 1998 international departures and arrivals are dedicated to the Airport and Airway Trust Fund. Those taxes were scheduled to expire on September 30, 1997. The Taxpayer Relief Act of 1997 extended them with significant modifications, including new taxes on domestic flight segments and international arrivals. The trust fund, which was established in the Airport and Airway Development and Revenue Acts of 1970, finances a substantial portion of the Federal Aviation Administration's budget. When fully phased in, the domestic air passenger tax will be 7.5 percent of the transportation cost plus $3 per flight segment (indexed for inflation). Air cargo is subject to a 6.25 percent excise tax. Aviation gasoline is subject to a permanent excise tax of 4.3 cents per gallon. (Noncommercial aviation fuels are subject to an excise tax of 15 cents per gallon on aviation gasoline and 17.5 cents per gallon on jet fuel.) Commercial air passengers coming from another country or leaving the United States are subject to a $12 tax per arrival or departure. Aquatic Resources Trust Fund. Taxes on gasoline, electric outboard motors, sportfishing equipment, and sonar devices for finding fish are dedicated to the Aquatic Resources Trust Fund, which was established under the Deficit Reduction Act of 1984. The trust fund is composed of two accounts: one for fish management and restoration and the other for boating safety. Taxes on diesel fuel for recreational motorboats were repealed by the Taxpayer Relief Act of 1997. Inland Waterways Trust Fund. Taxes dedicated to the Inland Waterways Trust Fund are levied at the rate of 20 cents a gallon on fuels used by commercial vessels plying specified inland and intracoastal waterways. The expenditures from the trust fund, which was established in 1978 under the Inland Waterways Revenue Act, finance up to half of the construction and rehabilitation expenditures for navigation projects on a designated system of 27 inland and intracoastal waterways. Leaking Underground Storage Tank Trust Fund. An additional 0.1-cent tax on gasoline, diesel, and other motor fuels; aviation fuels; and fuels used by vessels in inland waterways is dedicated to the Leaking Underground Storage Tank Trust Fund. Expenditures from the trust fund finance the cleanup of underground petroleum tanks that are leaking. The tax, which was initially established under the Superfund Amendments and Reauthorization Act of 1986 and had expired at the end of 1995, was reinstated by the Taxpayer Relief Act of 1997. Harbor Maintenance Trust Fund. Under the Water Resources Development Act of 1986, a tax on both ship passengers and the value of cargo loaded or unloaded at U.S. harbors, channels, and ports was dedicated to the operation and maintenance costs of the Saint Lawrence Seaway and harbors within the United States. The tax is 0.125 percent and, in the case of passengers, had been levied on transportation charges. The Supreme Court recently held that the harbor maintenance tax was unconstitutional as applied to exports. Subsequently—in June 1998—the U.S. Court of International Trade ruled that the tax on embarking passengers was also CHAPTER III OTHER FEDERAL SPENDING PROGRAMS AND TAX POLICIES 31 Black Lung Disability Trust Fund. Taxes of $0.55 a ton on surface-mined coal and $1.10 a ton on underground-mined coal other than lignite are dedicated to the Black Lung Disability Trust Fund, established in 1977 under the Black Lung Benefits Revenue Act. The trust fund finances medical care and rehabilitation for miners with black lung disease and makes disability payments to them and to their surviving spouses and dependents. Abandoned Mine Reclamation Fund. Fees that are structurally similar to excise taxes are levied on the tonnage of domestically mined coal and dedicated to the Abandoned Mine Land Fund, established in 1977 under the Surface Mining Control and Reclamation Act. The current fee is 35 cents per ton on surface-mined coal and 15 cents per ton on underground-mined coal or, alternatively, 10 percent of the value of the coal at the mine, whichever is less. For surface-mined lignite, the fee is 10 cents a ton, or 2 percent of the value of the coal at the mine. The Energy Policy Act of 1992 extended the authorization of the fees through September 30, 2004. Gas Guzzler Taxes. Gas guzzler taxes are levied on domestic and imported cars with fuel-economy ratings of less than 22.5 miles per gallon. The tax ranges from $1,000 for cars that get at least 21.5 but less than 22.5 miles per gallon to $7,700 for cars that get less than 12.5 miles per gallon. Revenue from the tax is deposited in the general fund. Taxes on Ozone-Depleting Chemicals. Taxes imposed on a variety of CFCs and halons as well as carbon tetrachloride and methyl chloroform are calculated as the product of a base tax amount and the specific chemical's "ozone-depleting factor." The base rate was set at $5.35 per pound in 1995 and has increased by $0.45 per pound per year. The amount of revenue collected, however, is small because production and import of most ozone-depleting chemicals are prohibited. Proposed Increases in Excise Taxes That May Cut the Use of Fossil Fuels and Emissions of Carbon Dioxide The Administration has proposed reinstating several taxes dedicated to the Oil Spill Liability Trust Fund and the Hazardous Substance Superfund (see Table 9). The taxes dedicated to these two funds expired a few years ago. Reinstatement would lead to price increases for oil and petroleum products and thus could indirectly result in reduced emissions of greenhouse gases. The Administration also proposed reinstating the motor fuel excise taxes dedicated to the Highway Trust Fund; those taxes were recently extended and are currently in effect through 2005. Oil Spill Excise Tax. The President's budget proposes to reinstate the oil spill excise tax of 5 cents per barrel on domestic crude oil and imported petroleum products. The TABLE 9. ESTIMATES OF REVENUES FROM PROPOSALS FOR INCREASES IN EXCISE TAXES RELATED TO ENERGY AND THE SOURCE Congressional Budget Office based on the Joint Committee on Taxation's estimates of the revenue effects of the Climate Change Technology Initiative in the President's 1999 budget. |