Common Dreams reports
Governments are failing to properly tax fossil fuel consumption, with enormous environmental costs, the IMF reports.
The fossil fuel industry receives $5.3 trillion a year in government subsidies, despite its disastrous toll on the environment, human health, and other global inequality issues, a new report by the International Monetary Fund (IMF) published [May 18] has found.
That means that governments worldwide are spending $10 million every minute to fund energy companies--more than the estimated public health spending for the entire globe, IMF economists Benedict Clements and Vitor Gaspar wrote in a blog post accompanying the report (pdf).
[...]Subsidies occur in two ways, IMF Fiscal Affairs Department directors Sanjeev Gupta and Michael Keen explained in a separate blog post published [May 18]:"[Pre-tax]" subsidies--which occur when people and businesses pay less than it costs to supply the energy--are smaller than a few years back. But "post-tax" subsidies--which add to pre-tax subsidies an amount that reflects the environmental, health and other damage that energy use causes and the benefit from favorable VAT or sales tax treatment--remain extremely high, and indeed are now well above our previous estimates.
[...]If anything, the report's findings are "conservative", Steve Kretzmann, executive director of Oil Change International, told Common Dreams. "[It] doesn't include direct subsidies to fossil fuel producers, and it doesn't include things like the cost of military resources to defend Persian Gulf oil."
(Score: 3, Insightful) by Anonymous Coward on Tuesday May 19 2015, @07:06PM
The same logic would be that the state of Minnesota subsidizes my food and clothing purchases because they are not taxed. Now how silly does that sound?
If they taxed everybody else for their food and clothing it would sound 100% serious.
(Score: 4, Insightful) by hojo on Tuesday May 19 2015, @07:32PM
No, it would still be wrong.
If I hit almost everyone I pass with a baseball bat, but skip the blondes, this does not represent a subsidy to the blondes. Lack of harm does not equal encouragement.
(Score: 2, Touché) by Anonymous Coward on Tuesday May 19 2015, @07:52PM
It is messed up that you equate paying for national infrastructure with hitting people with a baseball bat.
(Score: 3, Insightful) by mhajicek on Tuesday May 19 2015, @09:10PM
The difference between extortion and involuntary taxation is.. Wait, there's a difference?
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 0) by Anonymous Coward on Tuesday May 19 2015, @10:04PM
> The difference between extortion and involuntary taxation is..
Extortion doesn't pay for the infrastructure you depend on to live.
Nobody on soylent is under 30 years old and yet teenage logic is still de rigueur.
(Score: 2, Troll) by mhajicek on Wednesday May 20 2015, @02:35AM
You pay the mob, you get "protection". It's pretty much the same. The percentage of tax money that actually goes to infrastructure is statistically insignificant.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 0) by Anonymous Coward on Wednesday May 20 2015, @03:02AM
> The percentage of tax money that actually goes to infrastructure is statistically insignificant.
Only if you cherry-pick the most narrow possible definition of infrastructure.
(Score: 0) by Anonymous Coward on Wednesday May 20 2015, @05:59AM
(Score: 0) by Anonymous Coward on Tuesday May 19 2015, @10:04PM
It's not involuntary, you can totally pick up and move to another country whenever you like.
What? You don't have the money for international travel? You should have thought of that before being born poor.
(Score: 5, Insightful) by aristarchus on Tuesday May 19 2015, @10:09PM
The difference between extortion and involuntary taxation is
liberty, freedom, democracy. You see, you agreed to be taxed when you agreed to abide by the decisions of the legislature and courts of your unfortunate nation. ("God pity the nation that has libertarians", I think the saying goes.) Now just because you might happen to disagree with the majority decision on such policy, that does not mean you are being forced to pay taxes. You have a choice! Pay your fair share, as determined by said political process; change the policy by convincing enough of your fellow citizens to do so; or leave. I hear that the libertarian paradise of Somalia is wonderful this time of year!
But the other equivocation here is that not taxing is not the same as subsidy. Of course it is. If a tax is a fair policy, it will be fairly applied. Now this does not mean something as moronic, or Steve Forbesian, as a flat tax, but it does mean that were some citizens have a lessened tax liability, that must be compensated by some other social good. In other words, they are being subsidized by paying less in taxes because we as a society think that that money is better utilized by the subsidized entity. Religion is subsidized in many nations. Charity, education, medicine, and so on. And the petroleum industry. Any business should pay the same tax as any other, unless there is some good reason to diverge from equality. So what was (I am assuming there was one at some point) the social good provided to the nation by the oil business that justified the subsidy?
(Score: 1, Insightful) by Anonymous Coward on Tuesday May 19 2015, @10:54PM
(Score: 3, Insightful) by aclarke on Wednesday May 20 2015, @01:26AM
You're asking the wrong questions. In both cases, there is an involuntary, forced cost. You seem to be focusing on the costs of following the IMF's policy recommendations so I'll discuss the costs of sticking with what we have.
You, I, and pretty much life form on this planet for the next few thousand years will be paying a price for the carbon and other toxins we are dumping in the air. If I, for example, wish to opt out of this and live in a hut and subsist on scavenged berries, I could still very well suffer from a pollution-induced respiratory illness. That is an "involuntary taxation", to use your terminology.
We often don't ascribe a cost to the status quo, because this is how we've lived our entire lives and we just don't see the costs. We've learned to accept them, work around them, or assume that they're a requirement and that we have no better choice. We don't want to change until everyone else does because we perceive that to be the first to change would put us at a disadvantage (game theory). Maybe we are entrenched in a political ideology that has a vested interest in keeping things as they are, because change is scary.
If you look at only the costs of changing, and not the costs of not changing, that's not a fair equation. The point of this report is to attempt to quantify the costs of not changing.
(Score: 1, Interesting) by Anonymous Coward on Tuesday May 19 2015, @10:10PM
If I hit almost everyone I pass with a baseball bat, but skip the blondes, this does not represent a subsidy to the blondes. Lack of harm does not equal encouragement.
This is playing word games. It wouldn't represent a "subsidy" only because it doesn't involve money. It does represent a benefit to them. The status quo is "hit with a baseball bat" but if you are blonde then you can walk around without fear of that and have better freedom of movement, less pain, etc. A more concrete example would be in Saudi Arabia where only men are allowed to drive. Are you really arguing that men don't have it better than women in this case because they merely have a lack of harm but not real benefit?
Taking this back to economics, though, let's say I give all blondes $500. I'm sure you would say that would benefit blondes. Now let's say I take away $500 from everybody except blondes. That would still benefit blondes, as each dollar would buy more due to there being less cash in the economy (read: deflation) and each dollar buying more. It's of course "more complicated than that," but the general idea holds.
Here is another example which may make more sense to you. You can tax deduct (read: "not be hit with a baseball bat") for charitable contributions... do you really think everybody would be donating as much clothing, money, and everything else if they did not get that tax benefit for doing so?
(Score: 2) by FatPhil on Wednesday May 20 2015, @12:02PM
If the two are really different, perhaps you can tell be the value of x for which f(x) and g(x) are different here:
f(x) := 0 if (x \in subset), else tax.
g(x) := tax - g'(x)
g'(x) := subsidy if (x \in subset), else 0
where subsidy == tax.
If two functions are identical everywhere, then they are the same function.
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves