Saturday, July 30, 2011
SIMPLIFY THE TAX LAWS: END ALL SUBSIDIES
The next installment about the ocean being our next frontier will continue on Monday.
Your knee jerk reaction about the recent headlines regarding oil company profits--just Exxon+Shell+ BP+Chevron = $32 billion, only for the past quarter, so multiply by four to get $128 billion for the year--is to eliminate oil company subsidies. We should, but this sum is only about $4.3 billion/year, or 0.2% of the deficit this year, enough to continue government spending for 10 hours. Thus, the $4 trillion Congress wants to cut over the next decade can be helped by 1% if we take this "drastic" step.
This conservative blog site goes on to say that the oil and gas industry provided $17.7 million, only #19 in political contributions for the 2008 election cycle. Lawyers gave $127 million.
But GRIST, a liberal site, says these subsidies amount to approximately $156 billion over a ten year period, four times more than an oil advocate blogger. Thus, if this opposing article is right, then 1% is more like 4%, looking substantial. And, by the way, that ethanol tax credit actually goes to oil companies, not farmers. Except, if you read a renewable energy newsletter, apparently everyone benefited. No big surprise, but consider the source of the material. As an aside, this article reveals why the Farm Lobby relented to non-continuance of this subsidy.
Let's face it, some of you (certainly not me...I have principles) were smart to buy oil stocks a long time ago because they paid dividends and increased in value for a simple reason. They don't own much oil compared to countries, but they do everything else, for which they add a margin of profit. Thus, if oil drops to $50/barrel, they get their cut. When it someday jumps to $150/barrel, they will probably find a way to increase their profits for the actual percentage of their take drops by one-third. This will nicely cover the decrease in volume. In any case, as long as there is gasoline to sell, petroleum companies will do well.
Thus, what about cutting all subsidies: to farms, to you (mortgage, dependents, charity, whatever), to every organization (like churches, too). If there is a next and bigger economic crunch, lifestyles will dramatically worsen for all. Even Sarah Palin says end subsidies. Gasp...I might actually agree with her on something.
There are now six (make that five, as Tropical Storm Don brought little rain and some wind to south Texas, and dissipated) ocean storms, with Super Typhoon Muifa certainly looking ominous at 130 MPH, and appears headed for Okinawa: