30 Sep

“Government does not solve problems; it subsidizes them.” Ronald Reagan [Reader Post]

                                       

Democrats and the MSM Insist On Calling Tax Incentives ‘Subsidies’

Here are some examples of Democrats and their buddies in the MSM referring to tax incentives as subsidies:

  • From The Christian Science Monitor, an article entitled, “Democrats’ deficit-cutting plan: Big Oil subsidies the first target”. The article states: Senate Democrats launched an assault on tax breaks for Big Oil on Tuesday in what has become a ritual in a closely divided Congress.   The targeted tax breaks for the top five oil companies – Exxon Mobil Corp., Royal Dutch Shell, BP, Chevron Corp., and Conoco Phillips – account for about $21 billion in taxpayer subsidies over 10 years, or $2 billion a year.  “If we cannot end subsidies to the five biggest, most profitable corporations in the history of the planet, that come from the federal taxpayers, then I don’t think anyone should take us seriously about deficit reduction,” said Sen. Claire McCaskill (D-MO).
  • From The Huffington Post, an article entitled, “Senate GOP Votes Down Bill To End Big Oil Subsidies”. The article states: A ceremonial vote over whether to end subsidies to major oil companies failed on Tuesday, with 45 Republicans and three Democrats voting to continue the tax incentives to the five largest oil companies.   Still, the debate ovehttp://floppingaces.net/wp-admin/edit.php?post_type=most_wantedr whether to end the subsidies is unlikely to die with Tuesday’s vote. Senate Majority Leader Harry Reid (D-NV) vowed to continue pushing for the government to end the series of tax credits to five oil companies, which Democrats say could produce $21 billion over the next decade.
  • From Talking Points Memo, an article entitled, “Republicans Filibuster Bill To Repeal Oil Subsidies”. The article states: Democrats have turned oil subsidies into a major issue as Congress looks at ways to tame high deficits and the national debt.
  • From The Washington Post, an article entitled, “Senate Democrats push to end tax breaks for big oil companies to cut deficit”. The article states: So far, the Democratic tax agenda is focused on ending subsidies for big oil companies, a hugely popular proposal involving what Democrats see as a prime example of wasteful giveaways in the tax code. By raising the issue, Democrats are trying to force Republicans either to drop their rigid stance against new taxes or to defend taxpayer subsidies for some of the world’s most profitable corporations, including Ex­xon Mobil, Shell, BP, Chevron and ConocoPhillips.

The Difference Between Tax Incentives and Subsidies

If the government does not tax you on something, is it giving you a subsidy? Many politicians and the general public often answers yes. The premise underlying this Marxist view is that government owns all wealth and property, and only through its benevolence may you be allowed to use some of it. Liberal politicians often imply that a tax break is the same as a subsidy. However, a tax break is an instance of government taking no action, when the government keeps its hands off your property. A subsidy, by contrast, occurs when the government actively distributes tax money. Subsidization is a positive and destructive action taken by government. Perhaps giving tax breaks to oil companies are not smart laws. Perhaps they need changing. But they are not subsidies. The failure to tax Exxon more does not increase your payment to the IRS by one red cent.

President Obama continues to describe specific tax benefits received by companies in all industries as “subsidies for big oil.” In a paper published by the American Petroleum Institute, it says “Contrary to what some in politics and the media have said, the oil and natural gas industry currently enjoys no unique tax credits or deductions. Since its inception, the US tax code has allowed corporate tax payers the ability to recover costs and to be taxed only on net income. These cost recovery mechanisms, also known in policy circles as “tax expenditures,” should in no way be confused with “subsidies,” i.e., direct government spending.”

The federal government does indeed engage in the handing out subsidies, including those for ethanol and a variety of wasteful programs which would fail on their own merit. But depicting tax credits as a subsidy for Big Oil is dishonest.

Military Considerations Are NOT Subsidies

From this article, we learn that The Cato Institute calculated that the US military spent between $30 to $60 billion a year safeguarding oil supplies in the Middle East during the 1990s. But (and there is always a ‘but’) the article fails to mention the importance of that oil to this country, or about how that oil could be important to our strategic and tactical needs.

Col. (Ret.) John Collins spent 30 years (and three wars) in the U.S. Army. So he has EARNED respect for his opinion, unlike some liberal tree-huggers who love to spout opinions that have no basis in reality. His excellent article, “Military Intervention: A Checklist of Key Considerations” includes seven considerations for using military force to achieve political policies and/or achieve and preserve national security.

  • National Interests: Interests that directly affect US national security normally take precedence over all others [interests]. The only vital interest is national survival with sovereignty, territorial integrity, fundamental institutions, and values acceptably intact.
  • Threats to National Interests: Threats to valued national interests vary with regard to imminence and intensity. Decision makers who hope to avoid wrong wars at wrong times with wrong enemies cannot rationally conclude that military initiatives would be best until they consider alternatives, appraise probable risks,and prioritize each threat.
  • Political Aims and Military Missions: Political aims and military missions prescribe for US armed forces what must be done to safeguard national interests against perceived threats. Like interests, they should be prioritized to allow the application of resources for the most important purposes.
  • Strategic and Policy Guidance: Strategic and policy guidance, including military rules of engagement, can simplify or complicate the preparation of plans and the attainment of objectives.
  • Planning Options: US national security planners balance interests and capabilities against risks and costs, taking policy guidance into account, as they search for feasible, suitable, flexible, and politically acceptable solutions to intervention problems.
  • Resources: Competition for scarce resources always is fierce, but the best laid plans are useful only if ends (specified as desired outcomes) and means (forces and funds) match reasonably well, with enough in reserve to cope if other current threats loom large. Shortfalls create risks.
  • Congressional and Public Support: The extent of popular and congressional support ideally should be clear before we undertake a military intervention, but that may not always be the case. [my addition here: politics should stop at the water's edge, but we have seen how some Democrats and the MSM has supported our military]

So there you have it. Subsidies are NOT the same as tax breaks or incentives. You may disagree with tax incentives, but don’t be dishonest and call them subsidies. And please do not say that the military subsidizes anything.

But that’s just my opinion.

This entry was posted in Economy, Energy, Military, Politics. Bookmark the permalink. Friday, September 30th, 2011 at 2:19 pm
| 1,630 views

15 Responses to “Government does not solve problems; it subsidizes them.” Ronald Reagan [Reader Post]

  1. openid.aol.com/runnswim says: 1

    Elizabeth Warren is running against Scott Brown in Massachusetts. I like her opening salvo; in a few words, she makes a point that is way overdue for thoughtful debate:

    “There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you.

    “But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers that the rest of us paid to educate…Part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

    – Larry Weisenthal/Huntington Beach CA

    ReplyReply
  2. Hard Right says: 2

    Gee, a statist likes the rantings of an elitest marxist. There’s a shock.

    Here’s a little article that explains why her POV isn’t based in reality.
    http://hotair.com/archives/2011/09/22/video-the-lefts-got-a-fever-and-the-only-prescription-is-elizabeth-warren-talking-about-tax-hikes/

    ReplyReply
  3. Common Sense says: 3

    @openid.aol.com/runnswim: What’s the point other than she is an idiot. She is so far out of touch with reality there is not starting point. I also love it when Democrats in their twisted minds somehow try and compare 0-bama to Ronald.

    ReplyReply
  4. openid.aol.com/runnswim says: 4

    Hi Hard, here’s a quote from the article you linked, allegedly debunking Warren:

    What I like about this is how unbothered it is by the question of what the factory owner’s fair share of taxes might be. The implication, clearly, is that no amount would ever be fair. “We” built an entire civic infrastructure around this factory, without which it couldn’t operate, so really the factory owner can never thank us enough.

    It just goes on that way. It is ignoring Warren’s central point, which is a very simple point.

    Rich people should pay disproportionately more in taxes, because they owe a disproportionate amount of their success to government services. This was a sentiment first expressed by Adam Smith, by the way.

    Reality check: The marginal tax rates used to be 91% and then 70%, right up to Reagan. The very modest proposal was to rescind the Bush tax cuts and hike the marginal rates back up to 39%, where they were in the 90s. But this is class warfare and even Marxism. Just like ObamaCare has death panels.

    I like what Warren is doing, because she’s making a point which no other Democrat (including the ineffectual Communicator-in-Chief) has thought to make. What Obama says is that the rich should pay more because they can afford it. No, says Warren. The rich should pay more because they OWE more!

    Yes. Finally someone is saying it out loud. And we can all start to debate this. Conservatives will never buy it in a lifetime. But the people who decide elections just may buy it. It changes the narrative entirely. It’s no longer class warfare and it’s no longer socialistic “spreading it around.” It’s a matter that bills need to be paid and what everyone’s fair share should be.

    – Larry Weisenthal/Huntington Beach CA

    ReplyReply
  5. John Cooper says: 5

    “Government is the solution to every problem”? That’s Newt Gingrich’s opinion as well. Has anybody read his “Contract for the 21st Century”? His solution for ObamaCare is to replace it with another big government program that will “work better”. Sheesh…

    ReplyReply
  6. John Cooper says: 6

    @openid.aol.com/runnswim: Dr. Larry: You and Elizabeth Warren need to go back and read some Ayn Rand. I guess you were too busy in medical school to bother with philosophy. I wonder what her excuse is.

    ReplyReply
  7. Mr. Irons says: 7

    Scott Brown’s chances of losing isn’t exactly high… His approval ratings is rather high themselves… but let’s ignore how the people in Brown’s District feel about him versus what the Democrat Buffet wants to do.

    ReplyReply
  8. Wm T Sherman says: 8

    The wealthy already do pay more of the tax burden. Much more.
    http://www.ntu.org/tax-basics/who-pays-income-taxes.html

    And the top earners do not have enough inome to pay for this massive government. Not if you rasied the marginal rate to 70%, 90%, or 100%. Nobody has that much money.

    http://iowahawk.typepad.com/iowahawk/2011/03/feed-your-family-on-10-billion-a-day.html

    We have a spending problem.

    ReplyReply
  9. anticsrocks says: 9

    @openid.aol.com/runnswim: You said:

    Just like ObamaCare has death panels.

    I take it to mean that you believe otherwise.

    Wrong.

    …IPAB. Remember that acronym. It stand[s] for The Independent Payment Advisory Board. IPAB is the real death panel, the true seat of rationing, and the royal road to health-care socialism. President Obama won’t admit to any of that, but his speech in response to Paul Ryan’s plan did push IPAB out of the shadows and into public view, however briefly. – Source

    The Independent Payment Advisory Board was created by the 2010 health care law. Last month, in releasing his deficit-reduction plan, President Barack Obama called for increasing the panel’s authority, saying it was critical to controlling the costs of Medicare, estimated at $524 billion in fiscal 2010. Republicans and some Democrats have denounced IPAB, saying it will be made up of unelected bureaucrats who will wind up rationing care to Medicare beneficiaries.Source

    To say that IPAB is unpopular in some circles is an understatement. Almost all Congressional Republicans and some Democrats would like nothing more than to see IPAB disappear. Objections concerning the board focus on its power, its potential to cut provider payments, and the possibility that patient access to medical care could be limited if fewer providers participate in Medicare.Source

    Then you said:

    What Obama says is that the rich should pay more because they can afford it. No, says Warren. The rich should pay more because they OWE more!

    Wrong.

    Again.

    Think about it, Larry. The poorer you are, the MORE government you use. The richer you are, the LESS government you use. So if you really want to go down this road, then you better be careful because you are setting up the scenario for those “evil rich” people to claim that they should pay LESS because they use LESS government.

    The argument you use is asinine. Using your philosophy that the rich ought to pay more simply because they can, then let me ask you this hypothetical question:

    Suppose you and I both went into an appliance store to purchase a dish washer. You and I both happen to choose the exact same model. At the checkout lane, I am told that based on my income, the dish washer will cost me $599.95 plus tax. You are told that based on your income, the dish washer will cost you $1599.95 plus tax. How fair would you think that was? I mean after all, you are “richer” than I am, so you ought to pay more, you ought to pay your fair share.

    You know, for a supposed smart guy, you sure can’t see the forest for the trees.

    ReplyReply
  10. chipset says: 10

    The point is moot.

    Without the person spending money and risking his fortune (or credit) to build a factory, there would be no jobs, he wouldn’t pay for roads and other infrastructure. But, I am guessing that he is the only one who uses them, right?

    What about the people who want to buy his products? Aren’t they benefiting from the use of the road? And are the purchasers also benefiting from the education? And aren’t the employees benefiting because the education gave them jobs?

    You see, it all depends on how you look at the costs and who they should be associated to. Care to comment, Larry?

    ReplyReply
  11. mathman says: 11

    Is anybody there?
    How do governments pay for roads, police, courts, and so on?
    They charge taxes, of course.
    Who gets taxed? Not government employees. Government employees do not pay taxes. See Geithner, Timothy.
    Private enterprise gets taxed.
    No private enterprise: nobody to tax.
    So: the more government does, the more tax it collects. The more tax collected, the less private enterprise is left to tax. Sooner rather than later, the whole enterprise collapses. With no one buying, there is no need for roads. With no one hiring, there is no need for schools. With no one having property, there is no need for police and courts. See how easy it is?
    Just watch the state wither away [snark snark].

    ReplyReply
  12. lbcgn9 says: 12

    Reagan is right, Obama is an Idiot.

    ReplyReply
  13. Aqua says: 13

    @ Mathman
    You beat me to it. Who paid the taxes for the road? Was it the people who pay no income tax? And to expound upon this, if it was so easy to build the factory, why doesn’t everyone have one?

    @ Larry
    Rich people already pay disproportionately more in taxes. You and Greg are just driven to the point of hysteria about raising taxes on the rich to the levels they were under Clinton; like Clinton found some magic number for taxes on the rich. You have been shown over and over that this would not even make a dent in the deficit. You guys have all the answers, but you are proven wrong almost daily. Obama is going to take care of the people by spanking the banks on debit/credit card purchases. What are the banks doing now? They are going to charge flat fees for having a debit card. Thanks Obama. If for some reason you think corporations and the rich are going to roll over and take it, you are sadly mistaken and you are being shown as such everyday. And the people you are hurting are the very people you say you want to help. Two words…..Fair Tax!

    ReplyReply
  14. Kant feel Pietzsche says: 14

    Don’t fall into the leftist argument about “fair share”. Once you have done that, you have conceded Warren’s point.

    Like many on the left (disclaimer: I’m not from the right), Larry is captive to Marxist thought, which tends to confuse cause and effect. Roads, schools, etc. spring up AROUND economic activity. Without the factory(ies) and other commerce, there wouldn’t be any need for the roads, as the area would be agrarian and without a population concentration. A simple farm lane would do the trick. Likewise with the schools.

    Now obviously, a new prospective factory builder will choose an area with good infrastructure, and an educated workforce. But the new entrepreneur owes thanks to the commerce that came before him, not to some magical springing up of these attributes or to government.

    ReplyReply
  15. Eagle II says: 15

    twtlogo3fearless_red-350.jpg

    Dear Friend of the Times:

    We hope that you find this article by Dr. Milton R. Wolf informative. Dr. Milton R. Wolf, a Washington Times columnist, is President Obama’s cousin. He blogs at MiltonWolf.com.

    Best Regards,

    Marana Moore | Director of Public Relations
    maranamoore@washingtontimes.com | direct 202-636-2904 | fax: 202-636-2921

    The Washington Times
    3600 New York Ave NE | Washington D.C. 20002
    washingtontimes.com

    FOR IMMEDIATE RELEASE

    October 3, 2011

    WOLF: Bending Obamacare’s honesty curve downward
    Growing list of health care lies plagues president’s overhaul

    By Dr. Milton R. Wolf – The Washington Times

    The Obamacare house of cards is crumbling before our eyes. The Obama administration’s signature piece of legislation brings a sixth of the U.S. economy under federal control, and the writing is on the wall: Obamacare will collapse under the weight of its own false promises. The only mystery left is whether we will allow America to go down with it.

    Remember when President Obama claimed over and over again that his health care plan would “bend the cost curve downward”? He even declared resolutely that he would not otherwise sign the bill. Well, add that to the growing list of Obamacare lies.

    This is going to be a bumpy flight.

    The nonprofit and nonpartisan Kaiser Family Foundation recently released the results of a survey that shakes the president’s health care law right down to its core. Health insurance premiums rose in 2011 to more than $15,000 per family for the first time in American history. Not surprisingly, Obamacare itself is to blame for much of the increase. The forced requirement to include adult “children” on their parents’ insurance up to the age of 26, as just one example, contributed to 20 percent of the increase.

    Before Obamacare, the federal Centers for Medicare and Medicaid Services (CMS) projected annual health care spending would increase an average of 6.1 percent per year over the next decade. Despite the promises, after Obamacare passed, CMS recalculated its projections upward to 6.3 percent. Huh? Now the Kaiser survey shows that the actual results for the first year amounted to a 9 percent increase. Mr. Obama bent the cost curve all right – upward.

    Are the increased costs justified, even if it does break the president’s cost-curve promise because, after all, Obamacare finally was going to provide insurance for 46 million uninsured people? Brace yourself. According to Gallup, the percentage of adults in America without health insurance has increased since Mr. Obama took office and since he signed Obamacare into law.

    Please return your seat backs and tray tables to their full upright position. We are hitting some major turbulence now.

    OK, so health care costs are going up because of Obamacare, and more adults are uninsured since it began – mostly because of Obamanomics (that’s another story) – but at least Mr. Obama promised it would reduce the deficit, right? Well, that was then, and this is now. Administration officials are quietly abandoning the so-called CLASS Act portion of Obamacare, supposedly meant to provide long-term elderly care. In reality, this was the mother of all accounting gimmicks, which counted 10 years of tax revenues but just five years of expenditures to give a false sense of fiscal sanity. Democratic senator and Obamacare supporter Kent Conrad of North Dakota called this “a Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.” Absent the accounting gimmicks, the Congressional Budget Office now acknowledges that Obamacare actually increases the national deficit by $540 billion over the next 10 years.

    We have just lost cabin pressure.
    http://takeaction.wta007.com/wta/link.php?M=12894231&N=3547&L=1318&F=H

    For more information or re-print permission with proper attribution, please contact:

    Marana Moore, Director of Public Relations
    maranamoore@washingtontimes.com
    202-636-2904
    3600 New York Ave NE
    Washington D.C. 20002
    washingtontimes.com

    3600 New York Ave NE, Washington, DC 20002

    ReplyReply

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>