One of the few surprises to come out of the G-20 meeting in Pittsburgh this week was the sudden emphasis in the group statement on ending "inefficient fossil fuel subsidies." At first glance, this doesn't appear to be a big deal. I mean, who would be for inefficient fossil fuel subsidies, other than the oil and gas industry?
Second, many of these tax breaks stem from fundamental flaws in our tax code. The U.S. is one of the few developed countries that taxes its corporations on the profits they make overseas, making its system of taxation "worldwide" rather than "territorial."
I'm saying that corporate income taxes are too high; that our system of taxation is too burdensome; and that many of the "breaks" in our tax code were put there to let American businesses stay competitive. When you hear Obama talk about ending subsidies for fossil fuels, you should understand that he's really talking about raising taxes on energy.
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