When the tax code is written so some income is not taxed, you are creating a subsidy. Oil money is subsidized in the hopes it will reduce the cost of oil production (whether this works is debatable, and I am not the person to ask on this). Some of the income isn't taxed, and the amount of money you forego bringing in as a tax is the cost of the subsidy.
Subsidies aren't necessarily a bad thing. They can be used to encourage things in the economy that everyone wants. One way to encourage green energy growth is to provide the industry with lucrative subsidies until they can be more profitable and mainstream. When people have a child, they get a break on taxes to make it easier to raise their young.
This is basic language for what a subsidy is, but I just want to make this clear. Subsidies exist for all sorts of things, good and bad. The consequence of subsidies is that they lower the tax revenue, and so, we have a national interest in ensuring that our subsidies go towards things which are in the national interest, and efficient (since we'll receive less revenue to spend on other things).
But there's one thing that is subsidized that is an absolute disgrace. Hate speech is subsidized.