Quote:
Originally posted by Mmmm, Burger (C.J.)
The tax breaks seem particularly odd in a time of high oil prices, however. I'm not sure of the exact contours, but it seems that you would want to design a system that provided a subsidy to domestic production (in the form of tax breaks) only when the price of oil is relatively low.
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Subsidy?
(Sorry. It's my "when you forget to steal something from me, you haven't given me a gift" bent shining through.)
I think this is merely a continuum argument. If you design a capping tax break, maybe you actually discourage facilities production that becomes profitable at the higher prices? Again, it's not merely the economic argument about the effect of pricing and profit on widget production - there are strategic reasons why we want domestic oil production even though it's not a purely rational-economic decision.
