but gas subsidies are among the worst. That’s the message of this editorial from Bloomberg:
Nations from the U.S. to the U.K. to Russia continue to spend billions on tax breaks and other subsidies for the production of oil, gas and coal. Japan, South Korea and China support massive fossil-fuel projects outside their borders. For years, many countries — including some of the world’s biggest energy producers — have also used subsidies to lower gasoline and diesel prices, supposedly to help the poor.
The sums involved are huge. The International Energy Agency estimates that countries spent $493 billion on consumption subsidies for fossil fuels in 2014. The U.K.’s Overseas Development Institute suggests G-20 countries alone devoted an additional $450 billion to producer supports that year.
Of the fuel subsidies the very worst are consumption subsidies. The worst offenders, as reported here (Excel), is basically a list of the usual suspects:
| Country | Subsidy (billion $) |
| Iran | 82.2 |
| Saudi Arabia | 60.9 |
| Russia | 40.2 |
| India | 39.7 |
| China | 31.1 |
| Venezuela | 27.1 |
| Egypt | 24.5 |
| Iraq | 22.2 |
| United Arab Emirates | 21.8 |
| Indonesia | 21.3 |
| Mexico | 15.9 |
Consumer subsidies aren’t the only kind. China, Japan, and South Korea in particular also devote tens of billions to subsidizing oil exploration outside their countries.
Lest we be too complacent in the U. S. fuel subsidies tend to take the form of subsidies to companies (oil companies, auto manufacturers) and road building.
It’s astonishing to me that there is as much of a bipartisan consensus in support of this particular form of corporate welfare in the U. S. as there is. It resists the usual ideological stereotyping.
Both parties should oppose these fuel subsidies, each for their own particular reasons. And yet somehow they keep trundling along, a seemingly permanent part of our fiscal profligacy.
Looking overseas, we see what happens when gas prices rise because subsidies are cut, riots, rebellion and new governments. While here everyone claims credit for low gas prices, yet part of that everyone believes if its not taxed its a subsidy and/or subsidy should be given to the solar megacorps .
How what party is willing to take an electoral fall because it slashed subsidies and let gas prices rise to whatever the market will bear (+ a modest 20% markup).
First let’s be clear.
Flat taxes are the least distorting. Some deductions are unavoidable, to assure horizontal equity among taxpayers. MOST deductions are closet subsidies and must end. These are the largest losers.
The next largest category are preferential structures; indirect benefices like the “milk compact,” ethanol projects, and other “price supports.” Because they are indirect, they are too often unnoticed.
Direct handouts are least costly because they draw the greatest scrutiny.
Politicos are addicted to vote-buying by such occult transfers because that’s how politicos monetize power.
Government inevitably, unavoidably, does damage. The answer is clear. the smaller the government, the less damage it does.
and the largest amount of subsidies, ironically, go to the highest income earners.