Ending subsidies for oil and coal corporations?
What about suppressing the much talked-about subsidies granted to oil and coal corporations?
Suppressing subsidies will pressure oil and coal corporations to raise their sales prices in order to earn the same income, and not go bankrupt. Imports may gain grounds by the effects of competition. Eventually, customers will pay the bill with higher prices and with less domestic jobs.
And what are these subsidies? Some obscure civil servants of the IMF put subsidies at 6.5% of GDP, by including the pollution side-effects of hydrocarbons burned… by consumers. Let’s make oil and coal industries pay for our pollution? Oil and coal industries will go bankrupt, and we’ll have no more ambulances running and no more electricity.
Suppressing subsidies is identical to raising taxes. The subsidy debate is just a justification for raising taxes, which will be passed on to consumers. High taxation can backfire as discussed in the next misguided solution.