IEA Report Ranks U.S. Low Among Nations Subsidizing Fossil Fuels
November 22, 2010
IEA Report Ranks U.S. Low Among Nations Subsidizing Fossil Fuels
Washington, DC, November 22, 2010 - U.S. subsidies of fossil fuel are far lower than most other nations' subsidies, according to a new analysis from the Tax Foundation of an annual report from the International Energy Agency (IEA).
In advance of the G-20 meeting in Seoul, the IEA released its annual World Energy Outlook, a 738-page analysis of the global energy market that is highly critical of governments that subsidize fossil fuels.
"The U.S. doesn't even give enough subsidies to oil, gas or coal to register on a worldwide ranking of the biggest subsidizers," says Tax Foundation president Scott Hodge. "Yet the Obama Administration and Senate Majority Leader Reid continue their campaign to eliminate not only the few tax breaks that fossil fuel providers currently receive, but to withhold from them the ordinary tax treatment of business expenditures that many corporate taxpayers benefit from."
The report is Tax Foundation Fiscal Fact, No. 252, "IEA Study Ranks Nations' Subsidies to Fossil Fuel Consumption," at http://www.taxfoundation.org/research/show/26851.html.
The IEA says governments cite five major reasons for their fossil fuel subsidies: (1) alleviating energy poverty, (2) boosting domestic supply, (3) redistributing natural resource wealth, (4) protecting employment, and (5) protecting the environment.
Internationally, subsidies for fossil fuels far outweigh other energy subsidies. According to the IEA, support for renewables totaled $57 billion in 2009, only 18 percent of the value of fossil-fuel consumption subsidies.
"Giving away gasoline to low-income people and protecting the employment of coal miners are both common government policies, but the U.S. has leaned much more heavily toward environmental protection," says Hodge. "The $2.8 billion in U.S. tax breaks for oil and gas firms is much smaller than the $11.3 billion in tax breaks we are funneling into green energy such as wind and solar power production."
When the IEA measures fossil fuel subsidies as a share of gross domestic product, the biggest subsidizers are Uzbekistan, Iran, Turkmenistan, Iraq and Saudi Arabia. Even when measuring in dollars, which would be expected to push the U.S. up when compared to less wealthy nations, the IEA doesn't list the U.S. among the top 25 subsidizers. Iran, Saudi Arabia, Russia, India and China rank 1-2-3-4-5 as the nations offering the largest subsidies in billions of dollars.
Since taxes are the opposite of subsidies, Hodge cites the impressive amounts collected from U.S. oil and gas firms. Between 1981 and 2008, the oil industry paid more than $388 billion to the federal and state governments in corporate income taxes and almost twice that amount, $683 billion, to foreign governments.
"The demands from the Administration and its allies in Congress for eliminating what little subsidies the U.S. provides," concludes Hodge, "seem out of proportion. The Administration should focus on making the U.S. more competitive for corporate activities instead of targeting energy firms for punitive tax treatment."
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
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November 29, 2010
Obama Should Cut the Corporate Tax Rate
If Obama and his advisors are looking for a Clintonesque opportunity to move back to the center in a way that would make a real difference to the economy, he should partner with Republicans to cut the corporate tax rate and reform how we tax the foreign profits of U.S. companies. The evidence suggests that such reforms would not only be good for the long-term growth of the economy, but would improve workers' wages and living standards over time, says Scott A. Hodge of Forbes magazine.
A dramatic cut in the corporate tax rate could be the best tonic for the ailing economy.
Next to Japan, the United States imposes the highest corporate tax rate of any industrialized country at nearly 40 percent (combining the federal and state rates).
A 2008 report by economists at the Organization for Economic Cooperation and Development (OECD) determined that the corporate income tax is the most harmful tax for long-term economic growth.
High personal income taxes were found to be the second-most harmful tax for long-term growth, which would argue for not allowing the Bush cuts to expire on the "rich" as President Obama proposes.
The least harmful taxes for growth, according to OECD economists, are consumption taxes and property taxes.
Economic research also finds that because capital is mobile but workers are not, labor bears a disproportionate share of the economic burden of corporate taxes -- as much as 70 percent by some estimates. Economists such as Kevin Hassett at the American Enterprise Institute have found that workers in countries that have cut their corporate rates have seen faster growth in wages than workers in countries that have not cut their corporate taxes. (A recent Tax Foundation study found a similar relationship in our 50 states).
Thus, Obama can legitimately sell a deep corporate rate cut as being prolabor because not only will it lead to an increase in wages and living standards, it will most likely lead to an increase in jobs because America will be a more attractive place for inbound investment, says Hodge.
Source: Scott A. Hodge, "Obama Should Cut the Corporate Tax Rate," Forbes, November 22, 2010.
From the Tax Foundation Site - Testimonials
Facts and Figures on Government Finance is the most detailed and useful statistical portrait of where the spending goes and how it is financed." —Milton Friedman, Nobel Laureate in Economics
"[The Tax Foundation's] tireless efforts to educate the public about America's tax burden have made a big difference here in Washington, and throughout the fifty states. Our tax policies are better for it, and our economy is stronger." —U.S. Treasury Secretary John W. Snow
"Through its outreach efforts and programs such as Tax Freedom Day, the Tax Foundation strives to promote tax reform designed to lessen the tax burden that Americans face today.... And I am grateful for the vast assistance and support that the Tax Foundation provided over the years in the battle for reform." —Dick Armey, Former Majority Leader, U.S. House of Representatives
Oh, by the way, the following post is called boilerplate - an orgs statement of mission. It is meant
to refute this post.
Read this one to see what they practice and really say. Hodge is their "leader". And notice the people above that they use to promote their agenda. Right-wing apologists all.
For those that care anything about fairness there are many posts by me and Havakasha re taxes, wealth inequality and its ramifications, corporate malfeasance and conservative/libertarian lies. As I have said many, many times, dems do not have all the answers by far but cons currently have none.
This is the Tax Foundation
About the Tax Foundation
The mission of the Tax Foundation is to educate taxpayers about sound tax policy and the size of the tax burden borne by Americans at all levels of government. From its founding in 1937, the Tax Foundation has been grounded in the belief that the dissemination of basic information about government finance is the foundation of sound policy in a free society.
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Administrative costs are a loss to society, and complicated taxation undermines voluntary compliance by creating incentives to shelter and disguise income.
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As a corollary to the principle of stability, taxpayers should rely with confidence on the law as it exists when contracts are signed and transactions made.
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Concerned about the effect such expansion might have on private sector growth, a small group of business executives gathered in New York City to discuss how they could monitor fiscal activities at all levels of government and convey the information to the general public. They decided to launch an organization which, through research and analysis, could inform and educate Americans using objective, reliable data on government finance.
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