Credit where credit's due: the executive director of GM Powertrain's fuel cell activities realizes that this may not be the best time to clamor for a suck on the taxpayers' collective tit. As Automotive News [AN, sub] reports, J. Byron McCormick was careful to cloak his call for federal funding in vague and patriotic terms. "Without more investment, there is a real threat that alternative vehicle technologies and development of the hydrogen automobile will leave the United States… Other countries are investing heavily in this sector and could surpass the United States." Oh no! A hydrogen gap! Let's throw some tax money at it, 'cause if we don't "There is a real chance that [a hydrogen gap] could happen. If that happens, what happens to the jobs, to the learning and the skills that go with it?" Oh, hang on. "But for now, McCormick said the United States has technology momentum in the field. 'We have a wonderful opportunity to put the United States in a leadership position,' he added." Still, "There are a number of regions getting their act together. I would hate as a U.S. citizen and taxpayer to have the United States become complacent." And I would hate as a U.S. citizen and taxpayer to have to pay for any more of GM's R&D bill.
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Uh oh! Could this mean GM is broke! I am not a US citizen or taxpayer but I would not like to see taxpayers in the US footing GM’s R&D bills. They (GM) just don’t deserve it. Besides there is enough pressure on the federal Treasury as it is without an incompetent and greedy car company wanting a piece of it. BTW that vehicle in the photograph looks disgusting, it looks like a snowplough!
Yep, it’s criminal. How about we try a really keen idea. Let’s let the people with money take calculated risks that new technology will work. If they are successful, they get a patent and make lots of money. If they fail, they lose the money. What do you think?
Obo,
Nothing is better looking than a snowplow when you need one. Cheers.
Now before everyone gets their underwear in a bunch over this latest big gub’mint boondoggle, consider for a moment how much th U.S. subsidizes the petroleum industry. More than a billion dollars a year, roughly, and I don’t think anyone would argue that the oil industry desperately needs taxpayer handouts. It seems to me the issue of oil industry subsidies is a much bigger fish to fry, and more worthy of frying.
“The $150-billion for corporate subsidies and tax benefits eclipses the annual budget deficit of $130 billion. It’s more than the $145-billion paid out annually for the core programs of the social welfare state: Aid to Families with Dependent Children (AFDC), student aid, housing, food and nutrition, and all direct public assistance (excluding Social Security and medical care).”
“After World War II, the nation’s tax bill was roughly split between corporations and individuals. But after years of changes in the federal tax code and international economy, the corporate share of taxes has declined to a fourth the amount individuals pay, according to the US Office of Management and Budget.”
Corporate Welfare Information Center
“McCormick said the United States has technology momentum in the field”
Huh? I’ve got one word for him: Honda.
Yeah, it’s not out YET, so I guess Mr. Mac can keep spouting to uninformed reporters for a few more months. Or are they counting Honda as an American company now, since GM is doing it’s best to guarantee that Honda will build more cars in America than GM?
Face it, if that money is available to the US Government, they will find a rat hole to invest it in. Though hydrogen research may be better than most rat holes, they still need to entertain competing proposals from qualified institutions and determine ownership of the results. I don’t see why the winning institution would necessarily be a car company.
John
I’d be okay with another country getting ahead in hydrogen development. Let them implement it first. Wait 2-3 years and learn what NOT to do. Then do it right the first time.
In the mean time, we are leading by example with E85 production…
BuckD,
I call Bullshit. Please give us some examples of these subsidies. I hear that number thrown out all the time, but the only examples I ever hear about are either the royalties are too cheap (which is not a subsidy under anyones definition sense the royalties were agreed to when the leases were auctioned off for CASH) or they are about some deduction or other thing that was created to get someone to do something which did not make economic sense otherwise.
A million wrongs don’t make a right. We should not be subsidizing the oil companies either. If it makes no sense to do something, then it likely should not be done.
Gardiner,
Corporations never pay anything. Only the customers or the owners really pay. A corporation is nothing but a pile of paper. It’s the people that count. The idea that corporations pay taxes is even more ludicrous than Keynesian schemes like the proposed stimulus packagegs.
Landcrusher: “A corporation is nothing but a pile of paper. It’s the people that count. The idea that corporations pay taxes is even more ludicrous than Keynesian schemes.”
A corporation is viewed by our legal system as a person, not a pile of paper. More precisely, a state-chartered entity with legal rights separate from it’s owners, i.e., “the people.”
Sorry Buck,
That ain’t completely so. Our legal system treats a corporation as a person for certain and limited purposes (mostly taxes). If you want me to agree with you, please show me the corporation presently rotting in a prison.
At any rate, our legal system is just a PILE OF PAPER. It pays nothing either.
If you can’t understand this concept, I don’t know how to teach it to you online. Only people actually own anything. If you take something from a corporation, you are taking it from people. Saying that something is a property of a corporation is just shorthand for saying it is owned by the people who own the corporation.
Landcrusher,
I don’t have any legal training, so obviously I’m not anything close to an expert on this issue, but I’m fairly certain our legal system is a bit more substantial than “a pile of paper.” The system has a very real consequences for human lives.
Obviously corporations, like our legal system, are human constructs. But I think we can agree that corporations exist in a legal, conceptual, and to some extent material way. Obviously you can’t throw one in jail or take it out on a date, but you can levy fines and taxes on it, prevent it from doing some activities and encourage it to do others. To say that a company is just people is like saying a person is just a collection of cells. It’s a reductionist argument that makes no sense at all.
It makes perfect sense if you are trying to get people to realize that when you tax a corporation, you are taxing people! The owners, employees, and customers pay that tax.
What makes no sense at all is the belief that you can tax a corporation without any cost to anyone (except maybe some rich guys who were going to “waste” the money). Believe me, real people believe that due to ignorance or force of will. Many of those same people believe in Keynesian schemes actually helping. They might as well believe in mind over gravity.
Corporations can’t pay their “fair share” because they have no share. All taxes are paid by people.
I will spare you the whole speech on why a consumption tax is better.
I’m not personally suffering from any delusion that taxes on a corporation don’t affect shareholder dividends. I can’t speak for the rest of humanity. But I do see your point.
If I understand you then, individual income is being taxed unfairly multiple times through a corporate construct. That is, if we assume that a corporation is simply an income-generating device for individuals and not a separate entity with other functions and responsibilities. I’m not sure I accept that definition of a corporation, but then, I admit I have no clue, since I haven’t delved deeply into corporate legal theory. It’s definitely food for thought, though.
Buck,
We got into this little discussion becuase Gardiner was pointing out that Corporations aren’t paying enough taxes vs. individuals.
If you understand that a corporation is nothing but a construct that is owned by a group of individuals then you see what a ridiculous point he is making. He posts here enough that I know he is an intelligent guy, yet he somehow falls for this nonsense.
Whether the taxes on corporations are fair or not is not really the point. The point is that our tax system is so byzantine, and tied to a system of subsidies equally byzantine, so that in the end you and I have no clue who is paying or getting what. For all we know, it could be little old ladies who are carrying the weight. We just don’t know.
We listen to a bunch of noise from all sorts of interest groups who can barrage us with “facts” all year and yet we really do not know. That’s why I get upset when people start arguing about who pays what because none of us really has a clue. It’s criminal.
All I know for sure is that I feel I don’t get my money’s worth!
PS. The oil subsidies you talked about are very similar. Most of stuff that the anti-oil crowd puts out about them are so spun up they are not even close to being factual. I don’t know why people hate oil companies. Seems to me that it makes less sense to hate the oil companies than it does the Rockefellers, but one of them gets elected to the Senate.
Go figure.
It goes without saying that the signal to noise ratio in our media environment heavily tilts to noise. That said, I make an attempt, as you do, to discern the facts from the imperfect and biased information I receive. Complex systems are hard to get one’s mind around to begin with, but when you have people within the system deliberately trying to spin and obfuscate its workings, it gets close to impossible to get all the facts. But we keep trying.
Let’s take Enron for example. Obviously it’s easy to hide nefarious deeds inside a complex system
like that. They were able to get away with what they did for so long because the principles were masters of spin and no one really understood what the hell they were doing. That’s what can and does happen in any organization, be it government or corporations. So why shouldn’t people be distrustful of oil companies? They’ve provided plenty of reason to be so. They have enormous resources that they use to push their agenda through lobbying, PR, and party “donations”, as well as back-channel connections and god knows what other legal, semi-legal, and illegal means. It’s just simple common sense that one should be wary of organizations with so much power and influence, just as one should be wary of the power and influence of government. The difference is, I have a say in government, and government is, at least in theory, there for the benefit of its citizens. I have virtually no say in what Shell, Exxon, BP, etc. do. On the other hand, they have, AS CORPORATIONS, an order of magnitude more influence than I do as an individual citizen over my government.
And BTW, “hate” is too strong a word, but I’m not a fan of Rockefeller, who at the moment is attempting, along with Harry Reid, to get immunity for telecoms who broke the law and illegally wiretapped Americans at the behest of the Bush administration. I wonder who Rockefeller’s major contributors are? Wouldn’t be major players in the telecom industry, would they? Tell me again, why should I trust corporations more than government?
Personally, if I don’t like a company, I try to do little or zero business with them. That satisfies my need to hate them. Government forces their way into my life, so they are different. They even back up everything they do with guns.
I guess I just know enough about oil to know that it is nowhere near a monopoly. If you think oil companies make obscene profits, you are able to buy the stock, or even drill for oil yourself. When you have met people who did drill their own oilwell, you kinda get over the whole exxon runs the world fear.
So while the leaders at big oil companies do have a lot of power, you can influence them by buying the stock and going to the shareholders meetings. Unlike government, you will get the same value per share as anyone else (I on the other hand get no stimulus tax rebate, thanks ya’ll). Government lords over the oil companies every day. Also, you get to vote for best refiner everytime you fill up your tank.
Our government is now elected by a majority of people who are net receivers rather than net contributors to the treasury. Ain’t that dandy.
Let’s just agree to disagree at this point. We have taken this way off topic. Talk to you on another thread.
This is an interesting thread. I tend to be a fiscal concervative and a fan of free markets as long as market failures are regulated against (monopolies etc). But what I don’t understand is how big oil companies are posting record profits right now?
There are three types of oil companies.
1. Exploration companies, also called independents and upstream producers. These companies have no refining capabilities. They are of course showing record profits due to the high price of oil.
2. Refiners, or downstream companies which have little or no oil production of their own. These companies are not doing so well because presently the refining margins are not high in the US.
3. Integrated oil companies (Exxon, Conoco, Shell, etc.) have both upstream and downstream operations. They are not all doing that well. Exxon is doing really well because they are so incredibly huge and keep growing. Also, the refining margins in Europe are much higher right now, so they will show a high dollar profit BECAUSE the dollar is weak, rather than in spite of it. Marathon is an integrated company that did quite poorly because they have little or no upstream operations overseas.
Hope that helps.
The other thing to keep in mind is that Exxon’s billions represent a 10% profit. If you walked into a bank with a business plan that predicted 10% profit, you would likely not get a loan. Venture Capitalists would also likely not show much interest. Anybody making a big deal about Exxon’s profits is either ignorant, or just being stupid. At any rate, their stock is for sale so for anyone who thinks they make too much money, buy the stock.