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Today's Show » Well, make up your mind...

marnesdad
2 years, 5 months ago
Wilkow did a fantastic job of explaining how government oil subsidies actually work -- saying how there's really no money being given to the oil companies from the US Treasury. And, even though he's not 100% correct, the point he was making is that tax credits, incentives, access to low-interest, government-backed loans, some grants, and additional tax breaks to consumers of their product is just how oil subsidies work... What I don't understand, though, is why Wilkow had such a meltdown over the same government's economic stimulus package.... more than 40% of it was tax credits and incentives.... 30% of it was grants and low-interest, government backed loans..... I mean, look what the 'economic stimulus' (aka subsidies) have done for the oil industry.... they're rocking! Do the exact same thing for the rest of the economy and that's a bad thing?? What ever happened to consistency in our arguments, Andrew....?
crossofcrimson
2 years, 5 months ago
I haven't listened to the show (in a long time actually) - but you'd have to incorporate a little bit of basic (conservative) class-analysis to make heads or tails or what "tax-breaks" and whatnot would qualify as subsidies as opposed to simply a lessened burden. The short of it is, I think pretty obviously, that if you pay a lot of taxes (on net) and receive "subsidization", you're effectively having your tax burden lowered. If you pay very little (on net) and receive subsidization, you're actually a (tax) burden on everyone else. This is, of course, putting aside the conversation about what benefits such subsidies may have, or what oppurtunity costs are accumulated with their dispensation. Not to mention the conversation about consumption of public services, etc. It's safe to say Wilkow, in whatever he said, did not really sit and think about it too much. But, on the other hand, it's not hard to see why I conservative wouldn't oppose a tax subsidy to a corporation whose tax burden dwarfs it, while at the same time oppose mortgage tax-credits for people who already represent net tax-liabilities. It's a conversation worth having...but I think the issue is a little stickier than most people think. Even radical libertarians have split sympathies on this issue. I want any and all tax burdens to be lowered as much as possible - but there's something to be said for the unfairness of our current system; not even in respect to rich vs. poor or business vs. individual but rather those with the clout to shift and shape the current financial liabilities of the state vs. those who cannot or will not effectively combat it. Again, at the end of the day, trying to distinguish what is appropriately seen as a "subsidy" or something else is complicated - at least in the way small-government types use such terms. It's quite easy to catch yourself being hypocritical.
marnesdad
2 years, 5 months ago
In 2010, the oil industry subsidies, as defined by the Organisation for Economic Cooperation and Development, totaled just over $3.8B. These were comprised of tax credits, offsets, tax exemptions for the 'use' of the product, reserve purchases, and grants for research and development. So, to your point, $1.2B of the subsidies were tax credits, which, even though the bulk of it was tax credits exclusive to that industry, just means somewhat lower taxes on what is still a huge burden. Another billion went to purchasing oil for the strategic reserve, which I don't think should be called a subsidy. I do business with the government all the time, and they purchase my services -- they're certainly not subsidizing me. A little over $17M is granted to the industry for research and development. The rest is the federal government refunding farmers the taxes they pay on fuel ($923M in 2010). .... My argument wasn't that subsidies were bad or good. I was just pointing out that the exact same initiatives were employed to jumpstart the entire economy, and those, in Wilkow's eyes, were bad.....
crossofcrimson
2 years, 5 months ago
Right - I'm not disputing the breakdown on oil "subsidies"; nor whether they were good or bad. I was trying to clarify how you could see "subsidization" in one particular situation as amounting to something like a tax-cut, while in another situation, with different actors, it could viewed as something that amounts to something not so much like a tax-cut at all. If you're thinking about this as a political conversation about counter-cyclical fiscal remedies then maybe the distinction doesn't qualify as an objection. But, from the sound of it, the context of his statements seem slightly different. It just doesn't follow that because you may support various "subsidies" for fuel that you would support subsidies more broadly - even including commensurate measures bundled into a "stimulus package".
marnesdad
2 years, 5 months ago
The context of Wilkow's comments were centered on another of his sisyphean attempts to educate the 'pseudo-intellectuals' -- this time that oil subsidies don't constitute actual money coming out of the US Treasury and going to oil companies (he gets 99.54% credit for accuracy on that statement). He said, in his most caring tone, that these subsidies aren't 'spending'... they are tax credits, deductions, etc... My point is that Wilkow has been quite vocal on the 'trillion spent on stimulus' ($747B) as 'spending' ... and, of course, 40% of that is exactly what he says is NOT 'spending' above...
crossofcrimson
2 years, 5 months ago
Thanks for the clarification on what in particular he, and subsequently you, were addressing. I would say that he needs to be careful regarding what is seen as a "subsidy" and what is not with regards to the stimulus for sure. And, on the same note, he needs to be careful about what he's labeling as "spending". To the degree that subsidies aren't backed with actual spending cuts, they most certainly constitute "spending" - if if they lower the net tax burden of specific actors.
crossofcrimson
2 years, 5 months ago
The last part of that last sentence should start with " - even if...."
marnesdad
2 years, 5 months ago
That's very true.... Bush's infamous tax cuts with no corresponding spending offsets is a prime example of irresponsible 'spending'...
Dave911911
2 years, 4 months ago
Just for clarification of terminology, there are either outlays or expenditures. Outlays are what is actually sent out the door in payments - direct or indirect. An expenditure is one that decreases revenue without an actual payment being made. Such is the case with non-refundable credits like the non-refundable child tax credit. The credit is applied against the tax liability of the taxpayer, while a refundable credit, such as the Earned Income Tax Credit, is treated as a payment and the portion of that credit that exceeds the liability is refunded.

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