Posted on 05/14/2011 6:39:04 PM PDT by Steve495
This is out of control. On May 3 I wrote about how the left, President Obama and Democrats can’t admit that what they refer to as major “subsidies” are simply ordinary business expenses. Now Obama has used the word “giveaways” in a direct email campaign looking for donations.
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"The CEOs from the five major oil companies — which together booked $36 billion in profits in the first quarter of 2011 alone — went to the Senate on Thursday to try to justify the $4 billion in tax giveaways they’re receiving this year."
Read more...
(Excerpt) Read more at radioviceonline.com ...
I truly believe that most liberals have no clue about the finances of companies and the necessity of costs. Unless of course its the cost of running government programs.
U.S. oil companies pay $89 million dollars in taxes every day.That’s not enough for our bloated, greedy government. And they produce an essential product for the nation at great expense. The government produces nothing but regulations and worthless vote-buying schemes that have bankrupted the richest country in the history of the world.
Why are oil company execs hauled before Congress to be harassed by these over-paid slugs?
Somehow oil companies are “special.” Liberals wouldn’t have a problem with Ben & Jerry’s deducting expenses from revenue to calculate taxable profit.
They do not pay, they collect taxes. Both sides need to stop lying about this stuff. There is no reason to allow depletion below a certain level of cost. No one is guaranteed a 100% return on their investment.
So by this logic, as a business owner I can not deduct the cost of computers, software, tools, parts, cost of labor paid to designers, technicians, construction craft. Why be in business then? Why work? Who is John Galt?
The article is wrong as well, I’m afraid. It implies that Big Oil continues to get these subsidies and explains why they are justified.
BIG OIL HAS BEEN INELIGIBLE TO RECEIVE THESE TAX BENEFITS SINCE 1976!
Fox also keeps misstating this. You would almost think that they don’t watch their own network. Please watch this video. It is a former Democratic congressman from Texas who warns of the consequences if Obama continues to repeat this lie:
Thanks for the post - I’ve been wondering what this was all about. None of the stories I’ve read in the MSM detail exactly what the handouts are.
Crap, you would think that someone bothering to type a fact in all caps would not make a typo on the year.
Should have been 1975.
sheesh... :)
You’re right ... even Fox and CNBC have been awful in their reporting of this story. Especially O’Reilly, whose opinions are startlingly deficient in facts.
This afternoon I heard one of their reporters pronounce "corps" as in "Army Corps of Engineers" as "corpse." Obviously a Democrat imitating Obama's pronunciation of the word.
The hearings were televised. Sen. Schumer was at his usual level of obnoxiousness. When international companies pay taxes for their overseas revenues, they are not expected to pay them again here. That’s called double taxation. They deduct those taxes as expenses. It’s the same as if you lived in one state and worked in another. You don’t pay taxes on the whole amount in both states. They take into consideration you’ve payed some in the first state. Big Oil could easily transfer the headquarters to The Caymans and not repatriate their profits here and avoid taxes altogether (the way GE does it).
speaking of BOR, Stossel is having a special on energy running on Fox right now. He just showed a quote from BOR demanding to know why the price of oil is fixed.
Evidently BOR has yet to hear of that newfangled thingy, known as commodity markets, and doesn’t understand that the world sets the price. Not American oil companies.
Let's say we have an oil company. It makes $10 billion in capital investment this year. It gets 4 years to depreciate it (that is, take it as an ordinary expense) at the rate of $2.5 billion per annum for the next four years.
Assuming interest rates are nearly 0$% (which they are), that would give the oil company $2.5 this year, next year, the year after, and the year after that.
The Democrat proposal is to stretch that out to 5 years.
That would give the oil company $2.0 deductible this year, $2.0 the next year, $2.0 the next year, the next year, and the following year.
BTW, any Democrats following this the total deductions under the current standard will be $10 billion. Under the Democrat proposal they are also $10 billion.
The tax rate is constant for each year, so more taxes will be collected this year than otherwise planned, but in the end the same amount of tax is collected over 4 years of depreciation as over 5 years of depreciation.
The big factor is the interest rate. The federal treasury will not offset more interest with 5 years than 4. The net gain to the government is $0.
Now, what's the problem? Costs the companies nothing and the government gets nothing, so it's all zero, right?
Well, not quite. That half billion dollars not available this year will result in a loss of 10,000 jobs paying an average of $50,000 per year.
In short, this NULL CASE shenanigan with capital depreciation taxes the working class making less than $250,000 per year in the most direct way ~ they simply lose their jobs.
They know. They just believe that most people are too stupid to know that businesses pass on taxes to their customers as a cost of doing business.
One of the "costs" I didn't mention, is the lease costs that won't be paid to the government if the oil companies don't have that extra half billion to invest ~ and those lease costs sometimes turn into producing oil wells that pay royalties to the government.
So, you end up losing tens of thousands of jobs, or lease payments, or royalties.
When you get to "depletion" what happens when you reduce that is companies start turning off their more expensive to operate old wells and you get less domestic production. That means you have to import more oil.
You'll never go wrong assuming two things ~ that Democrats are IGNANT of math and they hate America and are trying to destroy our country.
I truly believe that most liberals have no clue about the finances of companies and the necessity of costs. Unless of course its the cost of running government programs.”
Liberals haven’t a clue about what it costs to run a government program nor do they care - it’s Other People’s Money. Congress and the President have no clue about the cost of running a company or a government program and they don’t care - it’s Other People’s Money.
They don't have the first frikin' clue about that either...
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