Streetwise Professor

July 8, 2013

Igor Sechin, Russia’s Arthur Laffer

Filed under: Economics,Energy,Politics,Russia — The Professor @ 9:04 pm

Say what you will about Mullet Man Igor Sechin, but don’t say he lacks chutzpah.  He’s proposing a substantial tax cut for oil companies.  You know, like Rosneft:

The head of Russia’s state-owned energy giant Rosneft has called for a large reduction in the tax burden on the oil industry, Vedomosti newspaper reported Monday, in a move that could increase friction with the government.

According to Vedomosti, Kremlin heavyweight and Rosneft CEO Igor Sechin said in a presentation that oil companies’ tax base should be cut from 55 percent to 35 percent to stimulate new investment and generate a windfall of up to 6 trillion rubles ($180 billion) for the state budget by 2030.

I’d be very interested to see Igor’s math.  Who knew he was a supply sider?

Russia is facing increasing budget stringency, caught between a slowing economy and Putin’s lavish pre-election promises to increase social spending.  (As one indication of increasing nervousness about Russia’s fiscal situation, Moody’s cut the ratings on the major Russian banks including Sberbank and VTB because of increasing doubts about whether the state could support them in a crunch.)Even if his math is impeccable, 2030 is a long way away.   Putin needs the money here and now. Which means that Sechin’s proposal is likely a non-starter.

But you have to give him points for brass.

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  1. Supply side as defined in Sechin-land:

    Supply is money.
    Side is which pocket, left or right, that it is to be placed in.

    Comment by Sotos — July 9, 2013 @ 8:32 am

  2. proof that Karlin is a Kremlin stooge –
    what scum – look at the last picture of him, he genuinely looks like the type of person you would want to stay far away from children.

    Comment by lulz — July 10, 2013 @ 2:12 am

  3. this is the slimer than funds the World Russia Forum – he is also attached to the Discovery Institute, as obvious by the link, a “think” tank best known for promoting “Intelligent Design”. This is the type of organization that pro-Russia forces in the U.S. have been reduced to attaching themselves to.

    Comment by lulz — July 10, 2013 @ 2:16 am

  4. Stunned, I am, by the wisdom of your comments.
    Dear Perfessor, you gotta really heavy bunch of readers here: genuine intulleckshul heavyweights.

    Comment by Patrick Armstrong — July 10, 2013 @ 2:57 pm

  5. they need lower rates because they see their profits growing. see jv w exxonmobil

    Comment by t c phillips — July 10, 2013 @ 8:43 pm

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