Edwynn
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ORIGINAL: DesideriScuri
If you tax the value of a well, shouldn't the $ amount of the tax drop as the value of the well drops?
They don't tax the value of the well. The change in value of the well is deducted from gross income.
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Taxes are based on the value, and when that value decreases, so should the taxes, no?
They don't tax the value of the well. The change in value of the well is deducted from gross income. Except that, unlike other businesses, the oil companies are allowed to double dip.
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The value of the company isn't what the tax is on. It's the value of the well they are paying on. That's the asset they are being taxed on. As the value of that asset depreciates, they are allowed a deduction for that depreciation.
So tell us, then, how much do the drug companies and electronics companies et al. get in depletion allowance for their patents, which decrease in value over time?
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Yeah, it's flying over my head. The oil in the ground isn't "equipment." The oil left in the ground doesn't fall under the same category as the equipment. Consumables also have their own tax deduction for mining companies (including oil), and that has come under fire. Those things don't fall under the typical equipment categories, either, even though they are equipment. When the amount of oil coming out of a well drops, the profits from that well will drop. Profits don't drop based on the amount left in. The oil that's in the ground doesn't profit the company until it's sucked out, or it's sold to someone else.
I didn't say that oil in the ground is "equipment," I said that it is double counting to deduct taxes for the depletion when taxes are already lowered due to less taxable profit from that depletion, and that they get the standard depreciation allowance for whatever equipment involved. Please, have at least two more cups of coffee before you continue further.
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Does the US Government give money to "Big Oil," or, would it be better described not taking as much through tax breaks? Which is it for renewables?
As one example, the refineries (Koch Bros. et al.) get 45 cents per gallon (from the Treasury) for adding 1.6 ounces of corn ethanol to 14.4 ounces of petroleum gasoline. Ten percent ethanol gas. In any case, economic benefit is economic benefit. But the bill has to be paid eventually, by someone. If you and three other tenants get free rent, the other tenants' rent will be higher than otherwise. But you consider it as being no harm to the other tenants, because it didn't involve making you pay the same as everyone else. How convenient. For you.
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There is a huge difference between getting money directly from the Federal Government and not having as much taken away in taxes.
You are too funny. Anyways, the oil companies are way ahead of you, and they understand fully the concept of composite economic advantage.
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Those who are getting money from the government are still benefiting from the credits and deductions in the tax code, too.
Exactly.
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"Big Oil" still pays an incredible amount of money in taxes each and every year.
Exxon paid zero taxes to the federal government in 2009.
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A paper manufacturer doesn't have a resource depletion deduction because they aren't dealing with that issue.
It's true that trees are renewable, but it's also true that they are being cut down faster than natural replenishment can keep up with at the moment. Eating less fast food would give us more environmentally sustainable paper, there's that.
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A typewriter company doesn't have consumable drilling equipment, so they don't get that deduction, either. Is that really all that tough to figure out?
Every manufacturer and almost every service provider has on their balance sheet consumable equipment, hence depreciation and amortization allowance. You obviously have not even taken accounting 101, yet you insist on bluster and incoherent blather as functional substitute.
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Here's how this all works out in your parlance. Anything that allows you to pay a lower tax rate than the top tax rate is a subsidy. Deductions, credits, lower rate tax brackets, etc. Those are all subsidies, in your book. That's all well and good. For you. That's not, for me. Reduced taxes and direct subsidy isn't the same.
You are incapable of understanding economic benefit if in any form other than direct subsidies or tax relief, thanks for making my point. The Mossadegh overthrow, US embassy hostage taking for over a year, two Iraq and one Afghanistan invasions, IMF (Treasury-led) bitch slapping of Bolivia and Equador, etc.,;all freebies, no cost to anybody, no benefit at all to the oil companies. That's what passes for 'deep understanding' from you.
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Big Oil may have had record profits, in gross dollar amounts, but what was the profit margin? What profit did GE see, and at what margin? Which is more important, gross $ profit, or margin?
You are incapable of understanding that economic benefit is derived across a band of profit margins, as played out in every economy, thanks for making my point.
Though by this discourse, such as it is, I doubt you could make meaning of it, here is one account of the profit margin in question.
It is difficult for me to come up with an example simple enough for even you to understand, but let's try this:
If you've got one $million of your own, and there are two different profit making opportunities you have available, one which requires 5 $million and another which requires 10 $million, and you can only get 4 mill in financing, which are you going to take? Does the margin matter in that case, as long as you feel good about the prospects? OTOH, if one venture has a 25% P margin and the other a 20% P margin, and the latter makes 20% more in total net income, which are you going to choose?
Why do you insist on being the loudest second grader in the class in all of these discussions?
< Message edited by Edwynn -- 8/23/2013 8:34:14 AM >
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RE: Little fact about global warming for you - 
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