Just wear a sweater.
Posted on 09/23/2009 10:49:02 AM PDT by larry hagedon
This man is a threat to the Republic. It cannot be said more plainly.
I’m not sure what you’re saying there. Lease costs should be depreciated completely over their lifetime just like any other capital investment. There’s nothing usual about that. The depletion allowance is a separate tax break, as far as I know.
Tax and regulate a business until it is no longer a viable business model and reduce them to begging for subsidies or ‘targeted’ tax breaks.
Raises revenue and puts them under the governments heel, both coming and going.
It’s also a myth that oil companies make “windfall profits.” Their after-tax profit margins are well below the margins of many software, drug, and medical device companies. Oil companies get attacked by the left largely because they are located mainly in conservative states in the South and Southwest.
That makes a lot of sense. Subsidize petrolium and then tax the hell out of it. Giving out money with one hand and taking it back with the other.
.....................Lease costs should be depreciated completely over their lifetime just like any other capital investment........................
My understanding is that the successful lease purchase is capitalized, and the write off is not normal depreciation, but a depletion allowance, that is amortized in relation to the amount pumped to the total estimated reserves leased.
A series of dry wells enable tax deductible writeoff of the entire lease cost.
That sounds right, and it sounds like standard accounting for a capital asset such as a leased asset. They may use the term “depletion allowance” in oil accounting for this kind of amortization of a lease.
But I think there’s also a separate tax break called the “oil depletion allowance”. I pulled this definition from a financial website. This sounds more narrow of a definition than other stuff I’ve read on this subject:
OIL DEPLETION ALLOWANCE — An allowable (by congress) percentage of tax-free income that an investor in an oil and gas limited partnership can receive from the gross revenues generated by the sale of gas and oil from a producing property.
Actually you’re correct that it isn’t standard lease accounting. The basic concept is the same, but amortizing the lease based on the amount of oil produced each year is a special accounting method for the oil industry.
Sweaters and shoe leather.
In other words, he wants to increase taxes on heating our homes and getting to work. I guess since he’s from Hawaii he doesn’t understand that.
***Obama wants to end all Federal subsidies for petroleum***
Does this mean that Mexico and Brazil will not get US tax money for exploration?
“This will not affect state, county, city or township gasoline, heating oil and diesel fuel subsidies.”
It will depend on the form of the “subsidy”.
If a state, county, city or township is giving a “subsidy” to fossil fuel enterprises, sure they can keep them set at their current rates, if they choose.
But that is a minority of the type of “fossil fuel subsidies” involving state, county, city and township governments.
It will increase the tax-payers cost for “subsidies” for state, county, city or township governments when they have to pay higher prices for the fossil fuel products that have been subsidized to them and/or that they are subsidizing for their constituents, for fossil fuel products whose new prices will reflect the loss of their federal “subsidies”.
Who, with a rational mind, calls a "reduction of greenhouse gas emissions" at the rate of 00.25 percent a year (a mere ten percent over a total of forty years) a "significant down payment"?
No one. So, in spite of the rhetorical language that Obama used, the factual information amounts to a minuscule so-called "down payment".
And is it worth it??
"In the US alone, the federal government gave US$72 billion in subsidies to the fossil fuel industry between 2002 and 2008, according to a study by the Environmental Law Institute."
Yes true. Is it significant? $72 billion over six years amounts to $12 billion a year - TO THE ENTIRE FOSSIL FUEL INDUSTRY.
Yet Exxon-Mobile alone payed $116.2 billion in taxes in 2008 alone - all by itself.
As usual, Obama is pandering to the ignorant and offering a smokescreen of snake oil that will never deliver a significant reduction in "green gas emissions" or greater energy security.
It will also affect state pension plans, such as CalPERS and others which have multi-billion dollar investments in companies like Exxon-Mobil, Conoco-Phillips, etc. This will lead to higher state and local taxes to offset the loss of pension fund equity.
How about GM or the banks or ACORN or milk price supports or farm subsidies or ..... substitute your favorite here.
Who gets to decide which businesses are subsidized and which are not? I would agree with you if all subsidies were repealed but who decides? This is one of those areas that government is better staying out of just like it would have been better to stay out of GM.
This is nothing more than pandering to his lunatic "big oil is evil" constituency and the greens.
“It will also affect state pension plans, such as CalPERS and others which have multi-billion dollar investments in companies like Exxon-Mobil, Conoco-Phillips, etc. This will lead to higher state and local taxes to offset the loss of pension fund equity.”
Also true.
There is a post-response from a few weeks ago that I still need to respond to. It was posted from someone in France who was complaining about all the profits that go to the “shareholders” - in the form of dividends and equity value - when instead lower-prices should be going to the consumer - the person from France was explaining. I wanted to ask them where their pension/retirement plan money was invested, and if shareholders were not compensated and prices simply lowered, from where would the company build new capital to keep improving its business? I think that poster called it “shareholder greed”.
If all a company gets back from its prices is simply today’s costs, its continuing-to-age-capital (plant and equipment) eventually kill the business, when they die, for lack of profit to invest in tomorrow. Rewarding investors and being able to borrow - having profits (retained earnings above expenses), means you are running a business and not a dead-end operation.
I have no idea, Miltie.
My point Muli, is that the fossil fuel industry is subsidized even greater than alternative energies.
That is my point, no more no less.
I have no answers for you beyond what the article said.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.