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LTLFTcomposite
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Re: What oil subsidies?

Sun Apr 08, 2012 10:52 am

It does look like you have to scroll 3/4 of the way down before you find anything related to short title of the bill.

Sorry, I'm not a specialist in corporate finance and tax law and don't follow all the details. I do know that the tax code is riddled with special exceptions for this and that for all sorts of companies.

There's a funny line in this article on the subject:
http://money.cnn.com/2011/05/04/news/co ... /index.htm
Congress is pushing to eliminate $4 billion a year in tax breaks enjoyed by the oil industry

I doubt oil companies "enjoy" anything; that choice of wording suggests they need to be punished. But there won't be any punishment of oil companies, they don't care, just take that $4B and tack it onto the pump price of the 140B gallons of gas, and you get a 2.8 cent a gallon increase. Have you really solved anything? Seems like all you did was raise taxes on Americans by $4B.

As for royalties not being paid, I suppose that comes from the belief that all things are first property of the state. The net effect will likely be less production in the Gulf, and the U.S. being that much more of a net importer.

So it always is with tax policy evaluated in a vacuum, on the assumption you can change one variable in the equation without creating other effects, sometime unintended.
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PaulScott
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Re: What oil subsidies?

Sun Apr 08, 2012 11:42 am

LTLFTcomposite wrote:
PaulScott wrote:...
It found that the U.S. military spends $80 billion per year on costs directly attributed to protecting our access to oil. That's 55 cents a gallon, BTW.
...

All of this is exclusive of the war in Iraq, a war that had mostly to do with oil. We're over $1.5 trillion dollars and tens of thousands of dead and wounded soldiers. I will not let anyone deny that oil played a significant part in why we prosecuted that war.

To deny this assertion is to deny those soldiers their due. It's unpatriotic and anyone who thinks that way is not a good citizen. If you want to argue the points of this, by all means let's hear specifics. But you cannot deny the fact of massive external costs of oil. You HAVE to own that!


I didn't deny it at all, quite the opposite, what I said was that it was hard to calculate. So I stand corrected, apparently the calculation was no problem at all for this think tank: Out of $684B in defense spending, $80B (a suspiciously round number) went to keeping cheap oil flowing.

So with half of oil going to power personal transportation (cars/light trucks), about $40B of that "oil company subsidy" spread across 200M vehicles works out to $200 per vehicle per year.

I would have no problem transferring that $40B to gas taxes if it were removed from taxes elsewhere, as the current structure shifts the costs to general revenues. However it is paid for, you still have to ask though who is the ultimate beneficiary of that $40B expenditure? The big bad oil companies or the consumer? And is it a good investment? And how can you ever calculate the ROI when human lives are involved? Maybe RAND has an answer for that too.


There are many more externalities besides the $80 billion. And no, this is not a "suspiciously round number", it's an approximation because there is no way to give you and exact number, like that would matter to you anyway.

You "suspiciously" ignored the cost of the Iraq war. The $1.5 trillion cost of that war (another rounded number), should calculated in, or at least a significant percentage. As for the cost of a life, that's hard to pin down, but I'd peg it pretty high.

Then there are the costs of the tens of thousands of Americans who die prematurely every year due to the effects of internal combustion pollution. Many of these people are children who, through no fault of their own, happen to live near freeways or downwind of refineries.

Add to that the costs of the massive environmental damage from the extraction, shipping, refining, distributing and burning of that oil and you have a very large number.

And yes, these costs should all be paid by the end user, the consumer. No one should be able to cause harm to others without paying the cost of it. The "big bad oil companies" will continue doing what they are doing, but their product's price needs to reflect all of its cost in order for the market to work properly.

Volt3939
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Re: What oil subsidies?

Sun Apr 08, 2012 12:24 pm

LTLFTcomposite wrote:... But there won't be any punishment of oil companies, they don't care, just take that $4B and tack it onto the pump price of the 140B gallons of gas, and you get a 2.8 cent a gallon increase. Have you really solved anything? Seems like all you did was raise taxes on Americans by $4B...


This does not raise taxes at all, it simply shifts the burden from the country as a whole to those who buy gasoline, where it belongs. :roll:
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BRBarian
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Re: What oil subsidies?

Sun Apr 08, 2012 12:43 pm

Volt3939 wrote:
LTLFTcomposite wrote:... But there won't be any punishment of oil companies, they don't care, just take that $4B and tack it onto the pump price of the 140B gallons of gas, and you get a 2.8 cent a gallon increase. Have you really solved anything? Seems like all you did was raise taxes on Americans by $4B...


This does not raise taxes at all, it simply shifts the burden from the country as a whole to those who buy gasoline, where it belongs. :roll:


Only in crazy conservative land.. Conservatives always are supposed to press for fairness and responsibility and lower taxes, thus ending welfare for gas guzzlers must be portrayed as an unfair tax increase.

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Re: What oil subsidies?

Sun Apr 08, 2012 1:15 pm

my conservative friends:

As for royalties not being paid, I suppose that comes from the belief that all things are first property of the state. The net effect will likely be less production in the Gulf, and the U.S. being that much more of a net importer
.

WTF? In what world does oil extracted from lease sales belong to anyone but the public and the commons?
And this goes for offshore oil, too?

You assume private ownership of dinosaurs that died millions of years ago and whose remains are under public lands?

and by the way, every state in the union has an extraction tax but CA, which almost approved via referendum this decade, but the oil companies weighed in with tens of millions to defeat the referendum.
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LTLFTcomposite
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Re: What oil subsidies?

Sun Apr 08, 2012 4:10 pm

PaulScott wrote:
There are many more externalities besides the $80 billion. And no, this is not a "suspiciously round number", it's an approximation because there is no way to give you and exact number, like that would matter to you anyway.

You "suspiciously" ignored the cost of the Iraq war. The $1.5 trillion cost of that war (another rounded number), should calculated in, or at least a significant percentage. As for the cost of a life, that's hard to pin down, but I'd peg it pretty high.

Then there are the costs of the tens of thousands of Americans who die prematurely every year due to the effects of internal combustion pollution. Many of these people are children who, through no fault of their own, happen to live near freeways or downwind of refineries.

Add to that the costs of the massive environmental damage from the extraction, shipping, refining, distributing and burning of that oil and you have a very large number.

And yes, these costs should all be paid by the end user, the consumer. No one should be able to cause harm to others without paying the cost of it. The "big bad oil companies" will continue doing what they are doing, but their product's price needs to reflect all of its cost in order for the market to work properly.


The irony of this discussion is I agree with everything you just said. But will adding 2.8 cents to a gallon of gas and sending that money to Washington solve these problems?
LTL
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PaulScott
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Re: What oil subsidies?

Sun Apr 08, 2012 4:18 pm

"The irony of this discussion is I agree with everything you just said. But will adding 2.8 cents to a gallon of gas and sending that money to Washington solve these problems?"

Where'd you get 2.8 cents? The external costs of oil are measured in many dollars. not a couple of cents. The $80 billion in military costs alone equate to 55 cents/gallon.

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Re: What oil subsidies?

Sun Apr 08, 2012 5:56 pm

PaulScott wrote:"The irony of this discussion is I agree with everything you just said. But will adding 2.8 cents to a gallon of gas and sending that money to Washington solve these problems?"

Where'd you get 2.8 cents? The external costs of oil are measured in many dollars. not a couple of cents. The $80 billion in military costs alone equate to 55 cents/gallon.


Paul.

That was the added cost per gallon of collecting an additional $4B in taxes spread across 140 billion gallons of gasoline a year.

$4B / 140B gallon x 100 = 2.85 cents per gallon

Actually that should have only been half, or 1.4 cents per gallon, since only (about) half of oil goes to gasoline.

Is the data flawed or did I make a math error?

My question was whether that really constitutes "tackling the issues of our time".

Happy Easter BTW. It's nice to discuss issues with smart people.
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