Two Views - In conflict

Jerry Davich at the Post Tribune points out today an article suggesting that Indiana taxpayers are footing the bill for Big Oil's tax deductions. You'll note if you go to the article that I disagreed, respectfully of course, and spent a few minutes trying to spell out why this line of thinking is really a trap.

• Basically companies don't pay taxes, they build those taxes into their prices and levy them on their customers. Sure there are times when the government changes the taxes so quickly that the owners of the company get nailed, and have to borrow or take from savings to pay the government, but eventually they build the new tax into pricing. Increasing taxes on any company is really just taxing the consumer more.
  
• Tax deductions that were designed to encourage some kind of energy investment, perhaps even a risky venture that doesn't make money but is worth researching, are merely a way to provide incentive. If the government removes these deductions, the companies may just stop the venture, thus there won't be any new money that the government can burn on something else.
  

There are really two ways of looking at government spending. The first and at least 53% of the population thinks this way, suggests that the more government spends the faster the economy grows. The second, suggests that when government spends it tends to waste a good part of the money on inefficiency and when it manipulates markets it upsets the natural order of capitalism.

I'll have to agree with the second ... and suggest that a general reduction of all tax deductions toward a flatter more transparent taxing policy would be best for our country and our state. But to suggest that there's a way to grab a bunch of cash from Big Oil and dump even more government money on the streets is to blur the truth.