Are You For Closing Wasteful Tax Loopholes?Submitted by Treubig on Tue, 11/12/2013 - 07:57
I hear politicians say we need to "close wasteful tax loopholes" and "stop subsidies to oil companies" in their speeches. Alright, Obama says this all the time but I would criticize the Pope if he had said it too. What exactly does it mean?
First some definitions (from Google):
Tax: a compulsory contribution to state revenue, levied by the government on workers' income and business profits or added to the cost of some goods, services, and transactions.
Subsidies: a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.
So a tax is stolen from a worker or company by the government and a subsidy is the government giving the money back to a company or worker. Usually the tax is taken from someone and the subsidy is given to someone else.
Ok, got it!
Now, if the government "closes wasteful tax loopholes" to "stop subsidies to oil companies", doesn't that mean that the money you earn is the property of the state and they allow you to keep some?
Let me see if I got this! The subsidy is the government lowering taxes. In other words, a sum of money granted by the government is less compulsory contribution to state revenue.