Subsidies, Tax Deductions are Different
WASHINGTON, D.C. - Before you can decide if you want the federal government to subsidize energy sources, you need to understand the difference between a subsidy and a tax deduction.
Petroleum refiners – who manufacture gasoline, diesel and other fuels – don't get subsidies. They simply get the same type of tax deductions other businesses get. This is also true for companies that produce crude oil and natural gas.
Webster's New Universal Unabridged Dictionary defines a subsidy as "a direct pecuniary aid furnished by a government to a private industrial undertaking, a charity organization or the like."
An example of a subsidy would be the $6 billion the U.S. government pays the corn ethanol industry each year, or the $7,500 the government pays individuals who buy an electric car.
A tax deduction is something quite different. The same dictionary defines a tax deduction as "an expenditure that is deducted from taxable income."
The rest of the op-ed is available online.
SOURCE: National Petrochemical & Refiners Association