Tuesday, May 06, 2008

Ending Oil Subsidies vs Gas Tax Holiday

Kevin Drum at Washington Monthly suggests a better idea than a few months of no gas taxes would be repealing the labyrinth of subsidies for oil companies. But finding out the costs for such a repeal is no simple task. Is it 20 billion dollars annually? 50 billion? Kevin writes:

I couldn't figure out which subsidies/tax breaks still existed, how big they are, who they go to, or who voted for them. Royalty relief alone was enough to bring tears to my eyes. If I spent several months on this topic instead of half an hour, maybe I could figure this all out, but surely someone else has already done this?

Anyway, this really ought to be the liberal rallying cry: forget a windfall profits tax, let's work first on getting rid of the massive corporate welfare infrastructure we've constructed for an industry that really, really doesn't need it. Not as sexy as a gas tax holiday, maybe, but it makes a helluva lot more sense."

The congress tried to enact some repeals and have not been successful due to threats of a veto or a Republican filibuster. Much of the time, legislation simply moves the money around into different categories and the public awareness of how much goes to who for what is simply lost.

Then there's the confusion of Royalty Relief, where the government is losing vast sums as the normal royalty rates paid by oil companies to the government have plummeted.

I'm left pondering on this idea that only presidential or legislative proclamations could cap or reduce the costs we all pay for just about everything.

1 comment:

  1. Anonymous1:42 PM

    A "gas tax holiday" is one of the dumbest ideas floated this campaign season. No one profits, except the oil companies who still get all the money. Yes! Cut the subsidies and tax breaks for the bloated oil companies. I have no problem with anyone making a legal profit. They sell a product, we fall all over ourselves to buy it. How about getting the government to help the citizens instead of padding the pockets of oil executives?