Sunday, July 04, 2010

So you want to reduce the deficit

While the "fiscal conservatives" always look first to the social safety net when looking for "excessive" spending to cut, they miss the most obvious target -- corporate welfare. Like the billions in tax subsidies to Big Oil.
According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.

And for many small and midsize oil companies, the tax on capital investments is so low that it is more than eliminated by various credits. These companies' returns on those investments are often higher after taxes than before.
As Steve quotes at the link, these aren't incentives, they're pure giveaways to an industry that regularly enjoys some of the biggest profit margins on the planet and whose executives take home multi-million dollar annual salaries. But the fiscal cons won't tread on that sacred ground any more than they would consider taking one penny from the bloated Pentagon budget.

No, according to the "experts," none of whom will ever have to depend on the safety net to survive, it's the lazy poor and old people who are the problem. In their world cuts to "entitlements" are the answer. We must destroy Social Securty to save it. But as Atrios so adroitly puts it, "The catfood commission is not about 'saving social security,' it's about stealing from a regressive tax so that rich people don't have to pay more in taxes."

If these guys on the commission weren't so obscenely rich and well connected, they would be locked up as dangerous sociopaths for that mindset.

[More posts daily at the Detroit News.]

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Anonymous Anonymous said...

the only way that congress will ever cut the budget is by enacting across the board cuts.

We reward congressman for bringing home the bacon, no one rewards them for skipping their share.

4% cut across the board would be a wonderful start.

12:40:00 AM  
Blogger Libby Spencer said...

I don't agree anon. Across the board cuts unneccesarily hurt social safety programs. Plenty of places to cut corporate subsidies and Pentagon spending first.

9:56:00 AM  
Anonymous Anonymous said...

I respectfully disagree. It will not happen, it just will not. It hasn't, won't and will never.

If you are a senator (for example) from states that have a lot of pentagon spending you are going to block those cuts, it's what your constituents expect of you.

And conversely if you are a senator from a state that receives many bennies from congress for social programs you won't cut that either.

Congress needs cover to do any cuts at all. You can't name me a time when the budget has actually gone down in our history, history says you are incorrect.

1:47:00 PM  
Blogger Libby Spencer said...

I don't disagree that it's unlikely to ever happen. Just saying that it should happen my way if we had a sane system that dealt fairly.

2:48:00 PM  

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