[taildragger]

My favorite was about "green energy". Actually, it was two of them, Comparing the 2.8 billion in tax breaks to oil companies to Obama's 90 billion to solar and wind. Pointing out later that 90 billion could have hired 2 million teachers.

Unless I am mistaken, they were talking about "depletion allowances"

Romney handled it fairly well, but the fact the American Public do not know what it is, and how it is important from a tax and accounting standpoint is scary unto itself...

If you want to eliminate "depletion allowances" ok, then let's have that debate w/ much lower marginal rates, but that will have to be down the road...

[justlurking]

Unless I am mistaken, they were talking about "depletion allowances"

I believe so. But, that's not just for oil companies. It's used by all resource extraction industries (i.e. mining).

The best way I know to describe depletion allowances is that it is like depreciation. The value of the asset (the land) declines due to the removal of the resource. It's just like depreciation on equipment. However, most people don't understand depreciation anyway.

If you want to eliminate "depletion allowances" ok, then let's have that debate w/ much lower marginal rates, but that will have to be down the road...

Actually, that's exactly what Romney said: he effectively said he was willing to get rid of it in order to lower corporate tax rates to 35%.

[Milton Miteybad]

Agreed...the reference may be to the depletion allowance, but I also recall a Democrat proposal to require capitalization and depreciation of intangible drilling costs instead of deducting them as an expense in the year incurred.

That would create a situation where dry hole costs would have to be capitalized and depreciated, even though the well was P & A'd as a non-producer, and contributed no new net reserves to the operator's balance sheet. Bad proposal all the way around.