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http://www.cleanmpg.com/photos/data/2/AmericanFlag.jpg The analysis comes as Congress considers an Obama administration proposal to slash tax incentives for the oil and natural gas industry. (http://www.chron.com/disp/story.mpl/business/6626252.html)

http://www.cleanmpg.com/photos/data/501/Pump_Jack_up_close.jpgJennifer A. Doughy - CHRON (http://www.chron.com) - Sept 19, 2009

Anyone think oil companies need govt money like Detroit? --Ed.

Washington — The U.S. government delivered more than twice as many federal dollars to research initiatives, tax incentives and other programs benefiting fossil fuels than it supplied to renewable energy from 2002 to 2008, according to a report released Friday by two public policy groups.

Over that seven-year period, government subsidies to fossil fuels such as oil, coal and natural gas totaled about $72 billion, according to the study by the Woodrow Wilson International Center for Scholars and the Environmental Law Institute. The center is a non-partisan think tank and the institute describes itself as a non-partisan research group that aims to strengthen environmental safeguards... http://www.chron.com/disp/story.mpl/business/6626252.html

The usual comparing of apples to oranges.

It requires thinking that all money earned is the governments first and anything not taken is a subsidy.

"$53.9 billion was in lost revenue from tax incentives"

That is not money taxed from other sources and paid to fossil fuel interests, just a small reduction in total taxes collected.

The government taxed me 10K on my income last year it didn't t subsidize me $55K because it didn't take all of my earnings. And it taxed fossil fuels too.

"government spending on traditional renewable energy sources such as wind and solar totaled $12.2 billion. Another $16.8  billion went to ethanol made from corn."

That is money taxed from other sources and paid to wind, solar and ethanol interests.

Big difference to me between lost revenues and spending, but then it wouldn't make for a sensational story. :rolleyes:

The article doesn't mention the biggest subsity, the US military protecting the oil shipping lanes and the oil fields.

The usual comparing of apples to oranges.

......

Big difference to me between lost revenues and spending, but then it wouldn't make for a sensational story. :rolleyes:

You are subject to a common misconception. If you think through the bottom line so long as you have a big profits it doesn't matter whether the government reduces your tax payment or cuts you a check--funds are fungible. The politicians who hand out corporate freebies know about your misconception which leads them to provide tax incentives because many people apparently don't understand them as a subsidy. It's shocking how little many people understand about money and finance.

In contrast, economists generally see tax incentives as an inefficient, somewhat anti-competitive way to provide subsidies. Established companies tend prefer the practice because it provides them a subsidy that rival start-ups are unlikely to receive (because start-ups generally are initially unprofitable.) To the extent that you perform an apple vs. oranges comparison, tax incentives are a less economically efficient way to administer a subsidy than a direct cash subsidies. If I had to take a guess I'd say you should add 20-30% to the cost of oil company tax subsidies to account for their inefficiency.

I'm not saying that the Woodrow Wilson Center article isn't flawed. For instance, credit for taxes assesed by other governments for overseas operations doesn't appear to be germaine to the competing subsidies argument--it is more a tax apportionment issue.

6.4 billion for the Low Income Home Energy Assistance Program, which is designed to help low-income households pay their heating bills.

Now there is a program that really irks me!

The problem with these 'good intention' programs is that A) everyone is taxed and B) people abuse them. I've had dealings with some these recipients and you'll go into their house (which I'm certain has very poor insulation) and the thermostat will be set at a toasty 78 degrees. They'll be walking around the house in shorts, watching the premium sports channel on a giant TV. Now I ask you, why is the government putting taxes on me so that these recipients can pretend that they're in Florida?!

I've lived here in Michigan for 30+ years and I can't remember a winter yet without freezing temperatures. I'm not saying that it isn't possible for Michigan to have a warm winter, but as a general rule of thumb, you'd better expect it to be cold. Maybe instead of paying for the premium sports channel, they should pay their heat bill. Maybe if they were paying their own heat bill, they would set the thermostat at 68 and wear sweaters/flannel shirts like the rest of us.

Either I'm just too old, or things are becoming more obvious. These kinds of government programs are an unfair burden to the working class and they should go. Chances are, a lot of people who are receiving this type of government aide could find a way to pay their own bills, if they were only forced to do the right thing.

My 2 cents

To the extent that you perform an apple vs. oranges comparison, tax incentives are a less economically efficient way to administer a subsidy than a direct cash subsidies. If I had to take a guess I'd say you should add 20-30% to the cost of oil company tax subsidies to account for their inefficiency.


Government itself is inherently inefficient, you are going to have to convince me that somehow taking money through taxing and paying it to someone else is more efficient than not taxing?

Please explain how taxing oil 100 and then giving back 1 is more efficient than taxing 99. The government had to collect more than 1 to give oil back 1.

6.4 billion for the Low Income Home Energy Assistance Program, which is designed to help low-income households pay their heating bills.
...

Either I'm just too old, or things are becoming more obvious. These kinds of government programs are an unfair burden to the working class and they should go. Chances are, a lot of people who are receiving this type of government aide could find a way to pay their own bills, if they were only forced to do the right thing.

My 2 cents

I have had a similar experience with a next-door neighbor who, in our 100F summer heat, runs their AC all day long, about 4 times longer than I do. I keep my thermostat at 79-80F in the summer, and in the early morning hours when it is usually 60-70F outside I open windows and use fans to air out the house. They keep all their windows closed, and I hear their AC come on at 8 AM when it is 65F outside!

However, I disagree with your conclusion on this subsidy based on a small sample that you may have seen. Many working people have to live in older rental housing with poor insulation which they cannot upgrade. There is no evidence I've seen that the majority are abusing this subsidy. The subsidy does NOT cover all or even most of their heating costs. Is there is a scientific survey indicating that a majority or even a small minority are abusing this subsidy?

We definitely should subsidize insulation and more efficient heating/cooling systems so that subsidies for fuel and electricity are not needed.

We definitely should subsidize insulation and more efficient heating/cooling systems so that subsidies for fuel and electricity are not needed.

Why?
Why should everyone be taxed for these subsidies? There will always be a lower end of any spectrum; whether it's income or house heating/cooling inefficiencies. Explain to me how it's fair to those who make the conscious choice to live within their means, to be taxed in order to help those who don't.

If you need help paying your bills, then ask a friend or family member for a loan. If that isn't an option, then approach a non-profit such as a church or local charity. But above all else, look at your budget first and see if there is room to live more efficiently. I will never agree that the government should take from everyone and simply give to those who aren't able to pay their bills. If the government wants to offer a one-time low interest loan to people in need, then OK. But don't just simply give it to them because that won't change their life style.

'Give a man a fish and you'll feed him for the day. Teach a man to fish and you'll feed him for a lifetime'