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Air travel is massively subsidized too (airport construction, airline and manufacturer bailouts); as is highway travel (automaker bailouts, free trade supply ch
by mikepurvis 7y ago
Air travel is massively subsidized too (airport construction, airline and manufacturer bailouts); as is highway travel (automaker bailouts, free trade supply chain, environmental externalities, health costs associated with driving and sprawl, plus gas taxes which cover only a small proportion of actual construction and maintenance costs).
It's difficult to do a true apples to apples comparison, especially when highways are also justified in part as a national security asset. But it's a little much to clutch pearls about subsidies for rail ("immoral", really?) without acknowledging how subsidized the alternatives are as well.
- gruez 7y ago>free trade supply chain free trade is hardly a subsidy.
- mikepurvis 7y agoThat really depends on your perspective. A "conventional" subsidy can be understood as a reverse tax— instead of paying money into the general pot for the privilege of engaging in some harmful/productive/profitable activity, you are paid money out of the general pot as a benefit for engaging in some activity seen by the government as desirable or beneficial. Cutting taxes in any form is a subsidy relative to what went before, whether or not the end state is above, at, or below the zero point. More concretely, if an automaker previously bought widgets from a local supplier for $10, but now buys them from overseas for $8 because of free trade, that's effectively a $2-per-widget subsidy. You can argue that it's a market efficiency and that most of the benefits are passed to the end consumer anyway so whatever, but when you get far enough down that path, then there are no widgets being made locally any more, which is the real cost of having subsidized the import of them by cutting taxes to zero.