Subsidies and Tax Increases
April 30, 2011 by Mike · Leave a Comment
I am increasingly concerned about the tone and tenor of the conversation concerning oil and gas subsidies. Some have suggested that dropping the subsidies is tantamount to a tax increase. That is ridiculous. Any feature of the code that is not widely available is a subsidy. Yes, that even means the mortgage interest deduction, which is a wealth transfer from the poorer (renters) to the richer (homeowners) and as a practical matter acts a subsidy to homebuilders, mortgage bankers, and real estate agents.
So if the mortgage interest deduction, which is the most widely available deduction, is a subsidy, then surely the oil and gas tax advantages – however meritorious – are also subsidies.