Gambling On Energy …

It all eventually comes out of our pockets

Øbama uses apt terminology when he says:

Instead of taxpayer giveaways to an industry that’s never been more profitable, we should be using that money to double down on investments in clean energy technologies  …

Putting money into undeveloped technology is, of course, a gamble. Even more so when tossing the baby out with the bathwater as Øbama attempts to do by  regulating traditional energy sources out of existence, while letting it all ride on technological advances that have not yet occurred. And, much to our misfortune, Øbama has been more than adequate in proving to us that he is not very good at deciding when and where to bet. Plus, like one addicted to the game, he insists on going back to the table after losing his shirt  in the hopes of winning it all back by using the same failed strategy. Unfortunately, it is not his money going on the board, but ours. Doubling down on some already proven-idiotic “investments” is a fool’s game – it’s nothing more than an invitation to toss even more capital down the never-filled sink-hole of the liberal wishing well.

Also troubling is that, whenever Øbama makes one of these bets and loses, one of his cronies invariably is enriched. Huh! Wonder how that happens?

Lets look a the recent  theater in Congress regarding “subsidies for the oil industry“. This action, elimination of “subsidies” for the evil, rich oil companies was floated as a means to gain funds for alternative energy (gambling) while not raising taxes.  Lets look first at that word “subsidy”.  Mirriam-Webster defines the word as:

a grant or gift of money: as
: a sum of money formerly granted by the British Parliament to the crown and raised by special taxation
: money granted by one state to another
: a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public

That last one appears to be their intent in the use of the term subsidize when they talk about the oil industry. So, then, our tax dollars must be going to the oil producers, the refineries to subsidize the production of oil and gasoline, right?

Dead wrong.

These supposed subsidies are in the form of tax credits or, rather, the ability of the “subsidized” industry to eliminate a portion of their income from the computation of taxes owed. By this definition, you are likely subsidized for owning your house and paying property taxes and mortgage interest. You’re subsidized for putting money into an IRA or a 401k. Get it? They’re not getting any money from the government; they’re allowed to avoid paying taxes on a portion (6% for the oil industry) of their income. This is akin to Congress claiming to have reduced the deficit today by eliminating some future planned spending (avoidance vs. actual savings), only they’re planning to spend today money that they don’t yet have; money they will get by eliminating the oil industry’s “subsidy” – in other words: another ordinary day on the beltway.

So, if Congress eliminated the ability for the oil industry to deduct 6% of the their income from their tax computatution, the oil industry would experience an actual 6.4% increase in taxes paid to the government, assuming no change in tax rate as a result of not deducting the 6% (do the math – it’s not that hard). So, what Congress (specifically: the democrats in Congress) wanted to do was jack up the amount of taxes oil producers pay on their income. They wanted to increase their (government’s) share beyond the egregious amount they already collect. (Notably, I did not include corporate income taxes in my previous treatise on taxes paid on a gallon of gas. Mea culpa…)

Of course, had they done so, the end result would be predictable: the cost of products produced using oil would increase.

Think about that a minute.

Can you name for me one product – just one product – you purchase regularly that does not involve oil in some way? If I were a betting man, I’d bet you can’t. But unlike Øbama’s record, odds are in my favor! I can think of no facet of our economy that oil does not touch in some way – whether it is transportation for employees, direct use within the product, transportation during stages of production or sales; transportation of  the components of machinery that make products; generation of the power required to produce it or control its production process –  oil is involved from the lowly sales outlet to the mighty financial markets. So, aside from the obvious impact at the pump, prices for everything you purchase would increase. Effectively, the democrats’ desire to tax evil industry is ultimately a tax increase to us all. Add to that the fact that the money Øbama would use for his energy gamble, contrary to what their use of the term subsidy would lead you to believe, is money the government does not have and you can see the results of this folly: higher costs for all, increased debt for the government,  higher taxes to pay against the national debt, and less money for you to meet your basic needs.

Painting industry as evil and greedy is disingenuous. No, to be true the issue can be better characterized as stupid politicians, misleading media, and gullible constituents.

-Pateratic

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