What does "subsidizing oil companies" mean? Is it a good thing, or bad?

Answer 1

Oil companies receive federal and local tax breaks. Since they don't have to pay as much in tax, it works as a subsidy. Ask the drug companies, the most subsidized lot of them all.

Answer 2

OK lets talk welfare first, oil companies employ many high paid union workers, welfare recipients give nothing back for at least 18 or more years. The oil company has to spend over a million dollars just to drill a hole and it could be dry, next if the hole has oil it costs another half million to build the rig to pump the oil out of the ground and meet all government invirometal regulations, they must build a tank farm to store the oil which cost about 50 million dollars on average, then they must build a refinery to distill the crude oil out of the ground into gas diesel kerosene and other byproducts, a refinery if built now would cost for a 1 million gallon a day output about 4 billion dollars, we have not built one since the last one in California in 1977, so now we don't have the ability to refine our own oil because of the environmentalist, so we depend on other countries to buy oil to run our country. ow if we take away every car from all the high school graduates we could slow this down our need for oil. But subsidy is a mute point we are destroying the oil companies most are now owned by foreign companies because the oil companies make 10 cents per gall and so do the gas stations, the government receives 75 cents or more in gas tax and they do nothing but collect it. now you tell me who is subsidizing who?

Answer 3

It depends on what being subsidised by the taxpayer. For example , if were using taxpayer dollars to pay taxes to a rogue regime for thier no it distorts behaviour on that rogue regime, and the oil companies should not get any subsidy by the taxpayers because oil companies only provide commodity of raw materials cheaper than it acutally is if you remove the subsidsy on oil the true cost of exploration would be known therefore it would force oil companies to invest more in technology than paying off thugs in poor countries to get access at oil. In all, most subidies are bad and its corporate welfare, and GM, Ford should sink before we bail them out because the taxpayer should not pay for poor corporate management of the company. Help the workers should be empathesis more than the producers now days because of globalization.

Answer 4

Subsidizing is like welfare. Oil companies have a price for their production, but in order to compete in markets they short their prices and the government pays them the difference. This starts off being good then after the economic cycle matures it turns out being bad.