Are Oil "Subsidies" Actually Subsidies or Are They Just Tax Breaks?

[Zatch]

http://www.americanthinker.com/2011/05/about_those_oil_subsidies.html

http://hotair.com/archives/2011/05/03/oil-company-subsidies-clarified/

[dbill27]

Ron considers them tax breaks, cause thats what they are.

[jmdrake]

Subsidies are the loan guarantees we give to nuclear power industry. Of course nobody's going to go after that because it's "green".

[nobody's_hero]

Good question. At what point does a tax break become a subsidy?

[driege]

Good question. At what point does a tax break become a subsidy?

When it arbitrarily favors certain industries and distorts the market. For instance, the home mortgage interest deduction is just a tax break, but it distorted the market and helped lead to the real estate bubble. Without it, home prices would fall to a lower equilibrium.

[Theocrat]

Actually, the federal government considers all tax breaks to be subsidies because they base it on the assumption that all of one's profits and/or income could be taxed by the government, but they are allowing an entity to keep some of its money (income and/or profits); thus, it's a subsidy of the U.S. government. It's harsh reasoning, I know.

[BrendenR]

Actually, the federal government considers all tax breaks to be subsidies because they base it on the assumption that all of one's profits and/or income could be taxed by the government, but they are allowing an entity to keep some of its money (income and/or profits); thus, it's a subsidy of the U.S. government. It's harsh reasoning, I know.

I think the more logical reasoning is that assuming everyone pays the same tax, competition is equal. If you give a group lower tax rates, you are inflating their ability to compete, or artificially giving them an advantage over the competition. Not sure that falls under what a "subsidy" technically is.

[polomertz]

Isn't our foreign policy, in a way, a subsidy to oil? We may still pay less at the pump than anybody else but some of our costs are hidden in our trill a year military presence + lives lost.

[Acala]

Isn't our foreign policy, in a way, a subsidy to oil? We may still pay less at the pump than anybody else but some of our costs are hidden in our trill a year military presence + lives lost.

Yup. Much of our foreign policy is about securing oil resources for the oil industry. Without the US military running interference, at enormous cost to us, the oil industry would have to pay substantial sums to buy or share resources.

[sailingaway]

There ARE subsidies, R&D subsidies, but there are also tax breaks. What Obama is talking about are tax breaks.

[07041826]

It bothers me to no end when "conservative" pundits complain about those who don't pay taxes and then turn around and say taxes are too high and government is too big! Get your story straight!

[Koz]

Pretty sure the government considers any amount of money you earn that you get to keep either a subsidy or a tax credit. They think they own all of our labor. Discussing the minor differences if futile.