I don't know that he needs to. Just that most others do. For these 5 oil companies, and other industries with a similar tax break, the effect is essentially the same as if they were all paying the same rates of tax and the government applied a subsidy. A tax break is basically a more efficient way to subsidise.Doctor Fate wrote:rickyp wrote:Subsidies--not really. Actually, they are tax breaks, depletion allowances, etc.--very similar to what most other companies in other fields get.
You can call a turd a rosebud. Its still smells the same.
Other industries pay for production costs but they aren't called foreign taxation. But oil corporations can pay royalties for extraction and deem them to be taxes. Depriving the US state of taxes evey other industry pays due to this preferential treatment.
You can demonstrate that every other industry pays them?
Really? So the US has not got higher wage costs than most other countries? Even using 'intuition' (and not bothering to check 'facts'), this casual observer can think of at least that extra cost to US domestic drilling. I can also add another factor - location. The areas to drill are in Alaska (remote, cold, sensitive to pollution) and the Gulf (deep water, storm-prone, recently the site of a major drilling accident) are costly. While some other foreign reserves are in difficult locations, it may well be that many are not.So, the fact that corporations receive tax breaks to drill domestically means that it costs more to drill here? That "truth" is not immediately intuitive to the casual observer.
Ah, so no point worrying about. So essentially any argument over the US budget that only concerns an amount of less than 'a few billion' dollars is a side-show, and cuts of that magnitude or less are basically next to useless?First, it absolutely is a sideshow. We are talking a few billion. The problem facing the US is tens of TRILLIONS. Eliminating subsidies, while politically cool, would be like spitting on a forest fire.
Well, that's ok (and I hope that we can't easily find any recent massive arguments about cuts of such paltry nine-digit amounts), but while a 'few billion' isn't much money to you, I can assure you that the about $21bn over ten years that the provision would have removed in tax breaks is a fair amount to these companies. When you compare the effect in one year, it's about 1% of the difference in deficit terms between the Ryan plan and the Administration's budget for 2012. For a single area of the budget, that's actually not too bad a contribution.
Does it need to solve the deficit problem alone? No. Can it contribute towards reducing the deficit? Yes.The key thing is this: Congress is throwing dirt into the air to convince us they are busy. However, they are failing to tackle the big issues: debt, spending, a budget. If you think this will go a long way toward solving those problems--prove it.
I await the next spending issue that has an effect of $2bn a year which affects an area you are less happy to support, and your principled opposition to a cut based on your comments above...