Are the opinions of Republican presidential candidates rubbing off on the International Monetary Fund, or does probing whether government subsidies do more harm than good just make sense in the 21st century global economy?
The IMF said in a Thursday afternoon tweet that it will probe the useful and harmful effects of government subsidies for energy innovation, small businesses and innovations in its April 16 Fiscal Monitor report.
"What can governments do to stimulate innovation?" an IMF video asks, showing a solar panel array with the word "stimulate innovation" appearing across one of the gigantic panels. "Can we identify ways to use the tax system to encourage business research and develop?
"Or should we ask a more fundamental question: Do tax incentives actually work?" the global financial organization continues. "Do they offer real help to small and medium size enterprises, or do they provide unfair advantages to large corporations?"
Presidential GOP contender Sen. Ted Cruz of Texas would be right at home with these questions. On Wednesday, he said energy tax credits should be repealed to provide a more level playing field. "I support a true all-of-the-above approach to energy, ending all energy subsidies and mandates so that all energy sources compete on an even playing field," the senator said, answering a list of question sent to the candidates by the conservative American Energy Alliance.
The Washington-based IMF adds, would it be better to use the tax system "to support new firms, rather than existing ones?" That question could be applied to President Obama's position that subsidies for the oil industry be phased out and subsidies for the the renewable energy industry be made permanent. But the IMF is not specific.
The IMF admits they are challenging questions, but they "lie at the heart of the relationship between government and the private sector."