Edwynn
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ORIGINAL: DesideriScuri
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ORIGINAL: Edwynn
So tell us, then, how much depletion allowance the drug companies and electronics companies et al. get in depletion allowance for their patents, which decrease in value over time,
A patent doesn't decrease in value over time. It grants near monopoly for a limited time, so as to let the company recoup R & D costs. Nice try, but completely different.
If the company doesn't continually come up with new patents and salable results therefrom, but only sits idly by on current patents, then the stock price goes down as expiration approaches. The value of such companies resides in their patents.
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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.
You don't say? Boy, you catch on quickly.
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When the amount of oil coming out of a well drops, the profits from that well will drop.
You don't say? Boy, you catch on quickly.
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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.
Actually, that is precisely what the oil depletion allowance does. It increases after-tax profit by allowing deduction for what the oil company could have made if there was the same amount of oil in the ground from that well forever. To no one's surprise for at least the last 60 years, oil wells don't last forever.
The only legitimate deduction concerns the amount, if any, that the driller pays to whomever to extract the commodity. In OPEC countries, this is not insubstantial. If It's in California, they pay nothing. So any other contrived deduction beyond that is not legitimate, and constitutes double dipping on expensing for tax purposes, and no other business could get away with that.
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What profits are there in oil that is still in the ground?
The oil depletion allowance... OK, so you're not catching on as quickly as I thought.
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I better not find oil on my land. I'll have to pay back taxes for profits I never even knew I had, right?
Do you know of any property owner who has oil under his property but no well, or plans for one, who is paying taxes of any sort on that oil? You are again relying on fatuous assertions in service some bewildered sense of reasonable argument. Considering what you read for "information" (see below), this is becoming more understandable.
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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.
Isn't your example of some sort of economic benefit for the ethanol industry, then? It's supporting the ethanol sector, not Big Oil. lmao
The ethanol industry in the US IS the oil industry, by way of the refineries.
OK, now I really have to take back that "catch on quickly" comment. Sorry.
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So, if I pay $1000 in Federal withholding taxes on my annual income and get back $800 through credits, exemptions, etc., is that a subsidy? If I were to get back $1200, would that be any different?
Yes. The difference is $400. You have been economically deprived of $200 by the government in the first instance, you have been economically benefited of $200 by the government in the second instance.
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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.
Those are the "double dippers." But, you are perfectly okay with that, eh?
It is you who are arguing for the legitimacy of double dipping by the oil companies, not me. Do try to keep up.
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"Big Oil" still pays an incredible amount of money in taxes each and every year.
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Exxon paid zero taxes to the federal government in 2009.
That was from that well known lefty vanguard, Forbes magazine. But what? Exxon says different? How could that be?
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Really?:quote:
In 2009 specifically, ExxonMobil’s total taxes and duties to the U.S. government and its subdivisions exceeded $7.7 billion, an amount that includes ExxonMobil’s U.S. income tax expense related to 2009 activities of approximately $500 million. Our U.S. income tax expenses over the last five years alone reach almost $20 billion.
Do you know what the nebulous terms "and duties" or "the government and its subdivisions" mean? I don't either, as Exxon felt it to be in their interest to not explain. Except that duties are deductible on their tax return. When people live in a double dipping world, they don't all of a sudden revert from that when presenting a cheapo power point BIG! circles presentation.
In any case, enough of which they were able to apply to their US tax return to pay no US federal income tax, according to Forbes. Exxon says it was $500 million. I can take either version, being that the 500 mil (by Exxon's own account) is pocket change accidentally spilled in comparison to the $40 Billion in net profit. They paid more in duties and taxes elsewhere because most of the countries they deal with are not nearly as stupid as the US.
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In reality, the numbers in the 10-K reflected more than ExxonMobil’s tax expense for 2009 activities. They included the effect of adjustments to our taxes for earlier years, which exceeded the amounts related to 2009. In fact, ExxonMobil’s income tax expense related to 2009 activities was approximately $500 million.
There they are again, crying about the 500 mill on the 40 billion profit.
BIG! circles, something we can all understand.
Except that ... Why do they say $7.7 billion in one part, $500 million in two other places, and now the BIG! circles are saying that it's actually $18.5 billion?
Straight talkers, those guys.
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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.
How does depreciation work? Isn't that over a period of time (5 years?)? Yet, a drill is likely to be worthless well before that 5 year depreciation schedule, no?
I'm not an expert on A&D, but there is not a one-size-fit's-all formula, it varies by industry. But in any case it is based on actual cost, as opposed to the oil depletion allowance, which deducts 15% off the top, regardless of actual cost, and that on top of A&D to the same company for whatever equipment used, drills and the rest. That's called double dipping. Even Michael Dell can't do that.
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Though by this discourse, such as it is, I doubt you could make meaning of it, here is one account of profit the margin in question.
Looks like that supports my argument that their margins aren't all that high. Huge profits only stem from huge revenues.
I dunno, the 30-34% margins from exploration and drilling in 2007-09 would look good to most people. In any case, the huge revenues actually prove MY point on the matter.
Boy, you are just up and down today on your ability to get it.
< Message edited by Edwynn -- 8/23/2013 12:36:43 PM >
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RE: Little fact about global warming for you - 
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