Good grief. We don’t want to end oil subsidies because oil companies might “pass on their higher costs to consumers”? That’s nuts. It’s the consumers who pay for subsidies. Whether it’s at the pump or in the paycheck, we still have to pay for it. The difference is that subsidies cost more. Subsidies have to go through layers of both corporate bureaucracy and government bureaucracy, and each layer adds to the cost.

The oil companies have to hire lawyers and lobbyists to make sure they’re getting the most subsidy they can; they pass that cost on to consumers, too.

The federal bureaucracy has to pay bureaucrats to take time to deal with the subsidies. That adds to our taxes.

And then, since we don’t even have this money right now, we have to borrow some of it. That adds to our taxes tomorrow—and every day after tomorrow, since we keep having to pay interest on a national debt we aren’t paying down.

End oil subsidies. And do it as part of a plan that ends all subsidies, including NPR and Planned Parenthood, and whatever has taken over from ACORN. The Democrats want to end oil subsidies? Great! Use it as leverage to do something good for the future.

According to the New York Times, gasoline subsidies amount to about four billion a year; added into all of our other subsidies, that’s a lot of money, and we absolutely should cut it. But in the United States we use over 140 billion gallons a year. Even assuming that every penny of the lost subsidy ends up going to the gas pump, which is unlikely, that’s three cents a gallon. ExxonMobil claims that less than 3% of of their earnings come from the United States. If that percentage holds to the lost subsidy, it means gas prices rise about a tenth of a cent; and that still doesn’t count the time and money saved from not having to deal with them in the first place.

It wouldn’t surprise me, however, if the “subsidies” the Democrats are complaining about aren’t subsidies at all—whenever the Democrats talk about them, they always use a variation on the phrase “tax deductions and subsidies”. The New York Times article uses “subsidies” in the headlines, but talks about “tax incentives” in the article. I think ending all tax deductions is a good idea, too—but only with a commensurate drop in overall rates and simplification of the tax code. That, of course, would mean no rise in gas prices.

What the Democrats want to do is target a specific industry. What the Republicans should do is leverage that into fixing the root problem. Good on Paul Ryan for saying it:

As part of an overall corporate tax reform, tax loopholes and deductions for all corporations should be scaled back or eliminated entirely. That obviously includes oil companies. Elsewhere, we state that subsidies for all energy companies need to be reduced or eliminated so that we can get government out of the business of picking winners and losers in the market.

You support ending oil subsidies? Then support the Ryan Road Map.