The Oil Exec Was More Right Than the Congresswoman

National Review ^ | 3/10/21 | Ramesh Ponnuru

[brownwill6767]

Representative Katie Porter (D., Calif.) was indignant, her tweet went viral, and she is getting rapturous coverage. She was also wrong.

At a hearing yesterday, Strata Production Company president Mark Murphy said that she had a “misconception . . . that somehow the oil and gas industry have benefits from some special sort of tax structure.” Porter hit back:

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00:04 / 00:30 SKIP AD You do benefit from special rules. There’s a special tax rule for intangible drilling costs that does not apply to other kinds of expenses that businesses have. You get to deduct 70% of your costs immediately, and other businesses have to amortize their expenses over their entire profit stream. So please don’t patronize me by telling me that the oil and gas industry doesn’t have any special tax provisions. Because if you would like that to be the rule, I would be happy to have Congress deliver.

[brownwill6767]

As my AEI colleague Kyle Pomerleau pointed out, though, many business costs can be deducted immediately: 100 percent, not just 70 percent. A manufacturer who puts a machine into service can deduct the cost faster than oil and gas companies can deduct their intangible costs.

[broken_clock]

“Do your dishes, hon”.

[Jonty30]

Oil companies do have a special tax deduction that is meant to keep oil companies from selling ownership to foreign nationals. It helps mitigate the risk of Russia or China from acquiring ownership of America’s oil companies.

[TakebackGOP]

Ramesh Ponnuru supported Trump’s impeachment and didn’t vote for him.

[Rurudyne]

Saying someone was better informed than a Congresscritter is as monumental as saying water is wet.

[Newtoidaho]

Typical liberal female who just can’t understand normal thinking.

[who_would_fardels_bear]

The ability to deduct losses over particular time periods, and count depreciation as a loss has become purely political and has absolutely nothing to do with reality.

People arguing about when it is pro-free-market or anti-free-market are just shilling for one side or the other of the argument.

How is this "good government"? How is this not either caving to crony capitalists or else caving to socialist intellectuals?

Is the "dismal science" still so inept that it can't come up with a formula that represents reality rather than allowing politicians to use business losses and depreciation as a political bargaining chip?

[Dusty Road]

Not many understand the word intangible and even fewer understand how it is applied. Basically if it’s not salvageable or recoverable it’s intangible. Most of your drilling and completion costs are intangible. Once you get above ground then you start seeing tangible equipment.

[Bill of Rights FIRST]

NO business in the United States should be able to sell to/should not be owned by another country, nor another company in another country.

[Bill of Rights FIRST]

Correction:

NO business in the United States should be SOLD to/should not be owned by another country, nor another company in another country.

[Jonty30]

That’s why oil companies that n the States get to discount their taxes a bit more than other businesses. It isn’t much, about 1%.

It is a wash in the end because it gets paid through shareholder income.

[Elsie]

They are BOTH wrong.

Companies do not pay taxes.

Their customers do.

A tax on business is just another cost of doing business like the light bill.

At least at the fuel pump we can SEE some of the taxes that  we pay directly; without being buried under vast amounts of paperwork.

[Rurudyne]

Knowledge in the mind of a progressive Congresscritter may be intangible then.

[Will88]

other businesses have to amortize their expenses over their entire profit stream.

Unless accounting has changed pretty drastically, you don't write off assets over some "profit stream". You write them off over the useful life of the assset, adjusted for any laws allowing for accelerated depreciation.