Aaand it's easy to bring out the "corporate welfare" game again, and pretend that taxation is paid by anyone but the consumer.

Hey, a little market science: price goes up, demand goes down, revenue diversion to Federal taxes goes where?

I'm sure you think the Feds use every dollar wisely.

OMG you can treat the cost of drilling a well as an expense of being in the well drilling business! Corporate welfare!
This is just anticapitalism trope #42. I'm tired of it.
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phunctor

oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.

This is dishonest. Tax breaks and subsidies are not the same thing.

I'd rather pay more for gas at the pump and pay less in taxes - at least that way I know where my money is being spent

Hey, be fair now. BP paid good money for that special treatment.

Just ask Obama's election committee.

Companies do not pay taxes. Customers pay taxes.

We'd all be far better off if corporate taxes were eliminated, completely. Unless you are a corporate tax attorney of course.

I propose that a flat tax with no exemptions, due November 1st would make a major change in how this country is run, for the better. Robert Menendez would have to find a job.

The article is more than a little confused. Companies can almost always deduct expenses like "rent"...otherwise, they would be paying income taxes on profits that they didn't actually make.

And when the author says "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"...I think the sources that he's quoting are really referring to the *income* from those capital investments, not the capital investments themselves.

There are indeed certain tax preferences for oil/gas drilling, which could be debated, but this article reads like it was written by someone with little understanding of either finance or taxation.

David, that's all quite true... one thing that a lot of people don't understand is that corporate income taxes tax *profit*, not gross income. If gross income were taxed, it would absolutely kill high-revenue, low-margin businesses, of which groceries is a good example.

Good points. By definition, subsidies are paid to a given party. Reducing the cost of something is not a subsidy, it's a discount. The authors logic assumes that productive activities somehow belong to the government, and they they're being offered at a discount to 'corporations'.

In principle I don't agree with any corporate welfare. But things get complicated when one jurisdiction competes against others to attract businesses. In the American context if State B offers tax incentives to companies that have been operating in State A, should the officials in State A just sit by and let these companies leave? Easy to say but extremely difficult for a politician to do.

Perhaps the worst offender of playing one jurisdiction against another is the Film Industry. They play countries against each other and states and provinces too, constantly seeking larger & larger handouts. This is spun as "tax incentives" but it's nothing short of welfare.

One of my least favorite bits of corporate welfare is when sports teams get cities to pay for spectacularly expensive new arenas; arena proponents always try to argue that this is good deal for the city - they'll make their hundreds of millions back many times over through new jobs and the rental revenue paid by teams and other events. To the best of my knowledge, this never happens. And yet the teams manage to do this in city after city, threatening to leave for greener pastures. Is having a sports team in your city really worth a big bond issue and years of debt that will never be repaid? I say no, and I like sports. Paying for billionaires' vanity projects is a ludicrous use of public funds.