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Politics : American Presidential Politics and foreign affairs -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (43715)	6/9/2010 8:51:27 PM
From: TimF	Read Replies (1) \| Respond to of 71588

And, of course!, also 'paid' with the loss of business by the COMPETITORS who are disadvantaged in the market place by the fact of having to try to compete against the unfair prices that are enabled by the subsidies. If your point is "unfair" advantages, then if a company gets a special tax of $x, and a special subsidy of $x (special in this case meaning other companies don't get it) than it doesn't have an unfair advantage. If (like the oil companies) the special taxes and fees it faces are larger than the special subsidies and targeted tax breaks, then it has an unfair disadvantage. In other words the competitors are subsidized to a far larger extent than the oil industry (for a broad definition of subsidy, for a narrow one the oil companies are not subsidized at all, but some of the alternatives are) -------------- If your issue is not relative advantages and disadvantages compared to other companies or industries, but just deviations from the free market, than the subsidy is no more a deviation than taxes. And it doesn't make sense to just focus on the subsidy side. If your concern is (as it is with many who complain about subsidies, but it appears you aren't focusing on this point) the idea that the oil companies are pigs at the federal trough, than they are not, since they are net payers to the federal government. Since you indicate that one of your concerns deviations from the free market. Then lets eliminate subsidies, lower and simplify taxes, and reduce regulation. All those actions reduce the distortion of markets by the government. For the oil industry we could eliminate the subsidies while also eliminating the special taxes, or since this would be revenue negative and there is so much concern about the deficit right now, we could at least eliminate enough of the taxes on refined products to cover the subsidies. Another point is that the claimed subsidies are mostly things like accelerated depreciation schedule. I would say that's less of a subsidy for the oil companies and more of a penalty to those who have to use longer depreciation tables. And even if you call it a subsidy, its not as large as the headline figure its usually given would suggest. It saves money up front, less taxes get paid right now, but at the expense of having less depreciation later. Of course paying $X later instead of paying it now, is an advantage that is worth money, but it isn't worth $X, its worth less than that.