subsidies vs. tax breaks
i was reading in the periodical volume, a joint venture including rem koolhas' 'oma' about a law passed by the us congress this last spring that gave the oil industry a $12 billion tax break.
it instantly occurred to me that these huge tax breaks are little more than industry subsidization and a major loophole in international finance. actual subsidization is a very tricky issue these days, for any evidence on this, look at how the us handled the eu's subsidization of airbus, but this is a way to go around that. it is essentially a $12 billion gift to the oil industry, who most definitely need it as they aren't making enough money.
it will be harder for other entities like the eu, or any of it's individual countries to implement anything like this as there is no way their populace would allow such a thing. there are far too many socialists still in power to let this happen and the u.s. knows this. their only option would be to lodge a formal complaint with the wto, to alert them and/or possible stop this practice, but i doubt they could win that battle. the wto cannot regulate tax codes in any of it's constituent countries. china and other asian economies could use this strategy to "stimulate growth" in their economies as their respective governments have much more power over their populace than their european counterparts. this puts the eu, the largest economy in the world, at a permanent disadvantage.
this is about 10% of the annual cost of the war in iraq. it seems odd to me that one of the industries that has benefitted most from this war through permanent insecurity of the ability to get enough oil from this part of the world, thus artificially keeping the price per barrel high, doesn't have to pay for it.
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