Hello Celticguy,
This piece is written by somebody in the industry being criticized, and it reads as such.
The first thing the article does is get sidetracked into semantics. It argues that what is going on doesn't meet the defiinition of the word 'subsidy.' Since the government is not paying this amount to industry, and simply allowing industry to skip paying this much taxes, that means it's not really a subsidy. The truth is whether we collect the full taxes and then give them a subsidy check, or simply give them an equal tax break, it's the same amount of money.
If this semantic argument really was effective, the article writer could stop right there. Argument over on a technicality. Conservative representatives of big dirty energy win, liberals lose.
Why say any more?
I'll tell you why.
Because the author knows the above is not a winning argument.
Then he goes on to throw more stuff up against the wall, just to see what of it might stick, if any.
He argues that money gets taxed twice in MLP's, so it's only right to get out of one of those levels of taxation. Well guess what. Money gets taxed over and over and over in every part of the economy. You go to a store and buy something. There's tax. The store owner earns some money. That's taxed as income. Happens all the time. Not a convincing argument either.
Then he thinks drilling costs should be a write-off. Excuse me. That's the business. Since when should government assist in the expenses of a very profitable for-profit business?
And there's the laughably lame argument that since their income from sucking the oil out of the Earth we all live on will be taxed, that they should neither own the land or part of the ocean they set up on, nor pay any royalties for it. Talk about greed!
Next up is allowing the value of the location to be depleted on paper over the years so they pay lower taxes. This has nothing to do with how much oil is extracted, they are just seeing a loophole and wanting to take it.
Then there's a big tax break for keeping manufacturing operations in the USA. Sounds good, right? We want that. Well, here's a better idea. Universal health care. If a government program provided health care our manufacturers would be more competitive on the world market because they would have no labor health care expense. Those expenses can be considerable. This would give American businesses all kinds of extra money. It's hard to figure why they are against it. Seems dumb to leave money on the table when they are in the business of making money.
Then he attacks consumption incentives. These are described: Consumption incentives range from direct subsidies to low income households for heating oil to tax breaks for farmers, and the US military. Wow. We wouldn't want to pull that, would we? Well how about we just require the energy providers to reduce their prices to these consumers by the same amount? Everybody needs heat. It is amoral for energy production and distribution to turn basics into a 'pay or freeze' situation, (akin to your money or your life) but that's basically what many would do without the subsidies. And they would have no choice but to freeze. So if government doesn't pay them, the energy companies don't get them. That's how that works.
You just knew going into the article from the top when he tried to argue semantics, and the definition of a word, that he was tossing anything out there to see whatever might float.
