Comment 116541

By kevlahan (registered) | Posted February 17, 2016 at 09:29:35 in reply to Comment 116540

I can understand why businesses don't like to think of tax breaks as subsidies, but economically they certainly are. And in modern economies the term "subsidy" certainly includes post-tax subsidies.

There are many types of subsidies, for example see

They include direct grants, tax concessions, in-kind subsidies, cross subsidies, credit subsidies and government guarantees (e.g. low interest loans), hybrid subsidies, derivative subsidies, subsidies through government procurement, market price support.

It is not reasonable to claim only a cash grant counts as a subsidy. That is not the way economists or governments or international financial organizations like the IMF define subsides.

Here's a world bank paper discussing the tricky question of how to evaluate fossil fuel subsidies:

Which explicitly includes specific tax concessions for fossil fuels. Is the World Bank wrong as well?

How you use the word should not depend on who you are. Subsidy has a well defined meaning in economics. To claim the IMF, the World Bank, the government of Canada, the profession of economics etc. etc. are not using the term subsidy properly is clearly a losing battle!

Comment edited by kevlahan on 2016-02-17 09:30:33

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