Republicans unanimously vote to continue OIL subsidies

[Diogenes]

The problem is that defense contracts are used by republicans as government funded job programmes. Efficiency is sacrificed for jobs and money.

I do not dispute this. I believe this to be absolutely true, however I will point out that the Democrats do this exact same thing, and what's more, they've been doing more of it and longer. Furthermore, this activity is consistent with their philosophy that it is the Government's responsibility to "prime the pump" of economic activity. As it is completely contrary to Republican philosophy, the Republicans are hypocrites for doing it, while the Democrats are not.

The problem is, you elect people you believe will hold the line on spending, you send them to Washington, and then later discover that they've sold you out. The Culture in Washington is DOMINATED by the spend, spend, spend philosophy, and it is extremely difficult to get people stubborn enough to keep their principles when they get there.

I will say that I am Extremely proud of my Senator Tom Coburn, and Proud to a lesser extent of my other Senator James Inhofe. Coburn has fought as hard as anybody, and far harder than most to reign in earmarks and other frivolous and unnecessary spending. Inhofe has done great work in rebutting the Global warming cranks, though he is far too tolerant of Federal earmarks for my taste. (I have contacted his office repeatedly on this issue.)

I dont see that much difference to programmes trying to fight poverty more directly.

They don't work, and the reason can be summed up with this old saying.

Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.

Entitlement programs do not empower anyone to take the reins of their own destiny, they only allow them to be indolent to their own disadvantage.

Now, I am NOT a big fan of redistribution of wealth. However, there are people that got into a bad place without this being their fault and I think that it is wrong to just drop them and let them rott in some corner.
There should be stricter rules for this though.
Personally I dont think that government funded pension is a good idea.
I do not mind healthcare though, as previously discussed.

I do not believe people who cannot take care of themselves should be left out in the cold to die. I believe that society should provide some means for them to sustain their lives in a reasonable manner. Of the people who CANNOT take care of themselves I have pity. On those who WILL NOT take care of themselves, I have considerably less. They should NOT be happier than someone who works for their living.

[Skipjack]

however I will point out that the Democrats do this exact same thing

And I wont argue with that at all.
In fact I think that the biggest problem the US has is that there is no strong 3rd opposition party.
So you will always have the Dems and Reps playing the ball back and forth between them. One time its the Dems that feed their supporters, then it is Reps that feed theirs.
It needs a strong 3rd party to keep the other two honest.

[Diogenes]

I think calling taxation "theft" is a bit melodramatic. However, taxation is most certainly a form of coercion.

You are free to move to ANY country you want to. Is that true or false?

"Our country, right or wrong. When right, to be kept right; when wrong, to be put right." -Sen. Carl Schurz

How, then, are you being "coerced" if you pay taxes where you VOLUNTARILY live?

I was born here. This is my home. If I am coerced here where I am from, how much less will I be coerced somewhere else from where I am not?

You are free to move to any country, or state, you want, with the kind of taxation you want. That is a simple truth that so many who claim taxes are "coercion" just ignore...

The same argument may be used regarding those who don't want to pay "Protection money" to the mob. It misses the point. Some level of taxation is reasonable and proper. Above that it is coercive theft. Democracy is often two wolves and a sheep voting on dinner.

I am no more "coerced" to pay my taxes than I am "coerced" to pay for a good or service in the private market.

Really? You have private markets that put you in Jail when you don't buy?

[Diogenes]

Dude, I just asked WHAT subsidies are they getting? Where is the Government writing a check to the oil companies?

You keep trying to characterize things in ways that FEEDS YOUR AGENDA, but don't address or describe REALITY. Won't work with me, but it might on somebody else...

You mean you can't answer the question. There ARE no subsidies to oil companies.

Oil companies OWE taxes just like everyone else. When politicians decide who the "winners and losers" will be by giving tax subsidies to SOME companies, but not ALL companies, they reveal they are more focused on benefiting one group THAN ANOTHER. That is a form of social engineering. This is especially true as they scream from the top of their lungs about deficits and spending, and then turn around and give the farm away to companies making more profits than ANY COMPANIES IN HISTORY!!!!! (but then complain about the subsidies that solar and wind get, even though they are a pittance in comparison.)

You have a disconnect from reality. Solar and Wind are getting money paid into the treasury. Oil companies are not. You simply want them to pay more than they are, (by the way, Government taxes on Gasoline are exactly 141.42 times more money than Oil company profits.) and because they don't you claim they are being "subsidized."

It's a good thing you aren't the land lord to a share cropper.

[Diogenes]

I am all for low taxes.
IMHO the most important duties of a government are:
Protection of its people to the outside (military) AND the inside (police, legal system). This has been a principle of state for centuries.
I know a lot of republicans are probably going to nod in agreement now.
However, I see "protection" going a little further than just armed protection.
I also like to include protection against fire (firefighters).
And at least to me this also includes a functioning healthcare system.
If you have a lot of sick people roaming the streets, begging to healthy ones for money so they can get treatment, you have a receipe for desaster.
Malnourishment will also let diseases get a foothold in the population more easily. The big flu epidemic in the beginning of the 20th century was made much worse by widespready malnourishment in the population.
Vaccination has to be made available to everyone in the population to facilitate herd immunity. There are many people that can not get vaccinated or on which the vaccination wont work.
Examples for this are infants that are to young to be vaccinated and people with a damaged immune system (cancer patients, transplant patients, patient with certain diseases). They are all sufficiently protected if at least 80% of the population have immunity (herd immunity).
So providing a system for healthcare and wellfare is to some extent protection to the inside.
To me this sums up the most basic of all duties of the government.
Now some things are a bit of a grey area. Education, e.g.
If you make sure your people are well educated, they are easier to protect. E.g. a well educated soldier will most likely do a better job than someone who can count 2 and 2 together.
Especially todays military jobs do require highly trained personell. If only your rich people have an education, you wont get very far. To few people and as we all know, they are usually not to eager to join the military (they would rather let the poor do that for them).
Education can also help with protection to the inside. Someone who is educated enough to have a perspective for his future, will most likely not sacrifice that perspective by breaking the law. This of course only applies to those that are criminals by circumstance and not by genetics.
So education can be important for protection, if only in a wider sense.
And so things keep going on and on.
Ideally the government would not need any taxes at all in order to do that.
After all, it used to have (and sometimes still has) a lot of property that has value and that should make money. Unfortunately the government is also inefficient and that is where the biggest problem lies (in every country).
IMHO, the US has to many politicians to begin with. Having a house and a congress makes the government very riggid and inflexible. Bills are prone to have inefficiencies and compromises inserted into them in order to pas both instances. That allone costs your country billions.
Then you have the same thing again on a state level...

Much of what you say has merit, but in this country we have a principle called "Federalism". It means that the powers delegated to the Federal Government are defined and finite, and the Powers delegated to the individual states are also defined and finite. (all other powers are reserved to the people.)

The Federal government should concern itself with matters that are properly the domain of the Federal government. (national defense, both internal and external) Much of what you have described beyond that are tasks INTENDED to be performed by the State governments. (if at all.)

The Federal government (as originally constructed) was not supposed to be dealing with individuals. It was constructed to confine itself to issues of running a collection of states. In other words, issues such as health care, Education and Welfare are properly the domain of individual state governments, not the Federal government.

To make it a little easier to see what I am getting at, I will employ the analogy of using the Police dept to collect garbage, or the Fire Dept to fix sewers. These tasks may need to be performed, but they are supposed to be performed by those entities empowered for these tasks, not the one that is supposed to restrict itself to its defined duties.

[Diogenes]

however I will point out that the Democrats do this exact same thing

And I wont argue with that at all.
In fact I think that the biggest problem the US has is that there is no strong 3rd opposition party.
So you will always have the Dems and Reps playing the ball back and forth between them. One time its the Dems that feed their supporters, then it is Reps that feed theirs.
It needs a strong 3rd party to keep the other two honest.

We have the "Tea Party", but I don't really see them becoming a third party. More like they will keep picking off ornery Democrats and Republicans who refuse to toe the line on spending.

For what it's worth, when this country revolted from Britain only 1/3rd of the populace was actually behind secession. The remaining population was divided into those who opposed (1/3rd) and those who had no opinion (1/3rd). Fortunately for us, the 1/3rd that won was far more dedicated and active than the remaining 2/3rds.

[Roger]

Your point is interesting and is not easily answered. I would suggest the possibility that were more people allowed to keep and spend their own money (by keeping tax rates low) then our economy might be substantially larger, and therefore the total money yield would be greater even with a lower percentage of taxation.

It is a complex issue and potential solutions are multi faceted.

Productivity, Population growth, Infrastructure, Energy, Resources, are the top 5 factors that affect GDP. Interest rates & Lending too. All these factors can have negative or positive effects on GDP growth.



If we look at only the top Ind rate, as a percent of GDP, the top rate has almost no effect on Fed revenues.



I realize that only looking at the top rate is an incomplete picture. And looking at effective rates is less problematical.

SO lets throw out China. India spends 6% and their 5 yr plan calls for 7-8-9%. Germany spends 6%. The E12 spends 2% just on surface transportation alone.
http://www.eea.europa.eu/data-and-maps/ ... ft-created

Russia between 4 or 5%.

Finally :

From wiki

http://en.wikipedia.org/wiki/Economic_growth

Economic growth is primarily driven by improvements in productivity, which involves producing more goods and services with the same inputs of labor, capital, energy and materials.

This matches well with my own take from above.

Productivity, Population growth, Infrastructure, Energy, Resources, are the top 5 factors that affect GDP. Interest rates & lending too.

Back to energy, we do need to expand our energy portfolio, I think its clear that energy can be a driving factor in GDP growth. It can also be a limiting factor, and we darn well need to avoid that.

[hanelyp]

Looking at the chart Roger posted, it looks like total federal taxes are pretty steady at ~20% of GDP. I'd posit that raising the top rate shifts economic activity to reduce activity covered at that top rate. So the only way to increase federal tax revenue is to boost the economy.

Anyone have a chart including state and local taxes?

[Roger]

So the only way to increase federal tax revenue is to boost the economy.

Have to read my qualifier, the chart only shows the top rate, its improper to say "only way to increase revenue". Those top rates generally apply to the richest .1% or so. And they are not effective rates, which as I said are less problematical.

I think it would be fair to say the best way to raise revenue is to increase GDP growth. If you raise taxes on the wealthy and corporations too much you'll stifle the economy. And if you look at effective rates when the top rate 94% or 70%, effective rates were in the 24% to 37% ballpark, because of deductions and exemptions, which were put in place to incentivize capital going to certain sectors. Most of those deductions and exemptions were removed in 1986 under Reagan, as they were obsolete and ( I think) the purpose was to widen the tax base under the lowered rates. This kept effective rates in a reasonable area.

Nobody paid 94% unless they wanted to.

[chrismb]

If we look at only the top Ind rate, as a percent of GDP, the top rate has almost no effect on Fed revenues.

That's a non-sequitur. You are inferring that any decisions to change the top rate of tax are done in isolation from decisions made to change any other tax.

In other words - you always get a basket of tax changes, and personal income tax may go down whilst other taxes [that impact the 'beneficiaries' of those tax cuts] may go up.

There are two simple questions that any right thinking person should know/ask; a) what is the percentage of GDP that their gov is taxing their country, b) are they managing that pot of income well. The latter question is, actually, far more important than the first. If the country gets back value-add benefit from that tax flow, then that's a gov doing a good job. But the more they take, the higher the risk that they'll just cock it all up in the long run!

[Jccarlton]

http://thinkprogress.org/2011/03/01/hou ... subsidies/

"House Republicans voted in lockstep this afternoon to protect corporate welfare for Big Oil, even as they call for draconian cuts to programs that everyday Americans depend on each day. As the House of Representatives moved toward approving a stopgap resolution to avert a government shutdown for another two weeks, Democrats offered a motion to recommit that would have stripped the five largest oil companies of taxpayer subsidies, saving tens of billions of dollars in taxpayer funds. The motion failed on a vote of 176-249, with all Republicans voting against (approximately a dozen Democrats joined the GOP). A similar vote two weeks ago to recoup $53 billion in taxpayer funds from Big Oil was also voted down, largely along party lines. The former CEO of Shell Oil, John Hoffmeister, recently said Big Oil doesn’t need subsidies “in face of sustained high oil prices.” From 2005 to 2009, the largest oil companies have made a combined $485 billion in profits."

So if subsidies for solar and wind are bad, why are they good for oil? You know, the industrial sector that is making record, ever increasing profits, while at the same time paying ever decreasing amounts of tax, and creating fewer and fewer domestic jobs...

You, know they say the devil is in the details. When somebody claims something, the least they could explain the details of what they are talking about for those of us who don't live in Congress. But since Think Progress, the mouth of Soros, did not deign to give us details I have to ask, what are they trying to hide? What was really going on? What relevance does the former president of an oil company have to do with anything? Is Think Progress opposed to subsidies or just certain ones?

[Roger]

That's a non-sequitur. You are inferring that any decisions to change the top rate of tax are done in isolation from decisions made to change any other tax.

Ahhh, Ok. The chart looks at the top personal rate or bracket, it doesn't look at any of the lower brackets, corporate or estate tax revenues for example. SO yes your basket idea is basically correct.

Decisions to change the top rate can be done in isolation or in conjunction with other changes, so no, I am not inferring that, not at all. Its a matter of policy choices, solely. Heres one example of a policy choice:

I want 20 brackets and a top rate of 70%, that would certainly raise considerable revenue. Including the fact that I would insist on tax breaks to stimulate my favored projects like solar and wind. and other deductions and exemptions to make the effective tax no higher than say... something like 40% should be the max thats considered. This way I am picking winners and losers, and solar, wind and other emerging tech and markets that will be vital in coming years. I wanna see them targeted now.

The reason I want 20 brackets: the lowest bracket can be 10%, the top 70%, 20 brackets better describes a curved line on a chart, and is fair to people that find themselves moving up or down a bracket due to small levels of income change, vs only 6 brackets.

Or we keep taxes where they are. and the effective tax rate where it is. And no tax incentives for capital to look at emerging tech and markets beyond what exists today.

[TallDave]

Oil companies don't get any direct subsidies to speak of, but they do get some slightly odd tax breaks, some dating back almost a century.

http://www.nytimes.com/2010/07/04/business/04bptax.html

Of course, not that long ago oil was $20/bbl and some marginal fields would have been shut down without those tax breaks, meaning they wouldn't be producing today. It's just another example of government planners having a flexibility problem, a limited information problems, and a failure of imagination.

What they should have done was make all the tax breaks a sort of call option that would only apply when oil was, say, less than $50/bbl.

[Roger]

I found the numbers for 2007

http://www.eia.doe.gov/oiaf/servicerpt/ ... /chap2.pdf

[Roger]

Found the vote mentioned on the DCCC site

http://dccc.org/blog/entry/house_republ ... r_big_oil/

Today, House Republicans opposed a Motion to Recommit that would ensure no "tax benefit" could go to a "major integrated oil company." [HJ Res 44, Vote #153, 3/01/11]

Heres the text of HJ Res 44:

http://www.govtrack.us/congress/billtex ... l=hj112-44