Monday, April 25, 2011

Oil Subsidies

Near as I can tell, "Oil Subsidies" are in fact, tax breaks.

Again, this argument that we're "giving" money to Oil Companies by not taxing them at as high a rate as we might otherwise assumes (1) That the Oil Companies' money belongs to the government and the government pays them to produce oil from those funds, and (2) that there would be as much revenue to tax at any rate from the oil companies if tax barriers to exploration and production were at those high rates.

Now I am in principle against "subsidies", which is in effect a redistributive thing in Phil's Dictionary.

But to hear the talking heads talk about it, this is what we're doing.  Taking money from people (A) and giving it to companies (B), because the government spent the money it was were "entitled to" from companies (B) and then didn't take as much from them as it thought it was entitled to take.

Are they getting a better deal than they need? Perhaps, and maybe this should be looked into.  But I imagine it has already, numerous times.  Even when Democrats controlled congress and didn't end them.  On the other hand, for example, in 2006, Oil Companies paid $138 billion in taxes to the IRS.  This does not include the sales tax they paid, nor the state fees they pay for being allowed to drill.  So it's not like the oil companies are making money and then we're just adding to it, which is how it sounds on TV.

They might just be making more money in gross than they would otherwise because theyre finding and producing more oil, thereby paying more in actual revenue at a lower tax rate than they would be paying if they were producing less at a higher tax rate.

And that doesn't even start to address how resulting gas prices affect the rest of the economy and boost production to be taxed and the extra revenue that produces.

You could argue me into pulling those tax breaks on principle alone, for sure.

But let's not call them "subsidies".

5 comments:

Van said...

Philmon, sorry for the OT comment, but being a Missouri resident, if you haven't seen this, you need to, and raise a ruckus about it.

Missouri State University Professors are teaching that "Violence is a tactic", is no big deal. As one student asks, quite logically (assuming reality is excluded from logical consideration), 'What number does it take to change a few terrorists into legitimate revolution?", showing that she's learned the Quantities over Qualities lesson very well indeed. The Professor, not distracted by such small thinking replies "When you win, then it's a revolution".

Missouri Education Watchdog has some transcription of the videos on her post.

If they aren't made to feel cautious about promoting communism... then they will succeed in promoting communism.

philmon said...

Van, these are UMKC and UMSL associates with the University of Missouri System. MSU is a different college in Springfield.

Which doesn't make it any less outrageous. Thanks for the heads up. I am passing it on.

philmon said...

Hey Van ... shoot me an email at cluebattingcage at gmail - so we can talk offline a bit.

Anonymous said...

I couldn't make it all the way through the "Violence is a tactic" video. These people make me sick to my stomach.

They also make me want to head to the nearest gun show and stock up. In case they get tactical nearby.

Mark-o the wonder geek.

Whitehawk said...

I posted the video on my state senator's facebook page. Haven't heard anything yet.