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Claims that the U.S. government spends “hundreds of billions” subsidizing fossil fuels dominate energy debates—but they don’t reflect fiscal reality. In this new issue brief, Senior Fellow Paul H. Tice cuts through the rhetoric to examine what the federal government actually spends, how “subsidy” definitions have been stretched beyond recognition, and why theoretical models are being mistaken for real budgetary support.
Drawing on official tax and spending data, the brief shows that explicit subsidies for fossil fuels are small and stable, while renewable energy accounts for the overwhelming majority of U.S. energy-related tax expenditures. The findings have major implications for energy policy, affordability, and grid reliability.