The Surprisingly Strong Case for Colonizing Venus

[barfo]

There are no tax breaks for oil companies.

http://www.nationaljournal.com/energy/breaking-it-down-oil-industry-tax-breaks-20110512

All things listed are available to every kind of company.

Intangible Drilling Costs

This allows for the deduction of costs associated with drilling, such as those for labor and exploration.

Sure, that one is available to every kind of company that drills for oil.

barfo

 

[Denny Crane]

Sure, but I'm a liberal. I'm supposed to be in favor of spending money on pointless trifles. You are supposed to be an anti-government yahoo, and so you are supposed to be against anything that doesn't immediately increase the wealth of the upper class. I don't understand why you want to throw taxpayer money away on cold fusion.

Why are you in favor of big government, Denny?

barfo

I'm not in favor of anything that immediately increases the wealth of the upper class, nor big government.

 

[Denny Crane]

Sure, that one is available to every kind of company that drills for oil.

barfo

Intangible Drilling Costs

This allows for the deduction of costs associated with drilling, such as those for labor and exploration. API says that this deduction is “no different than the policy behind and treatment of R&D costs for other industries” and notes that while small, independent companies (not targeted by the Senate legislation) can deduct all of these expenses in the first year, bigger, integrated companies can deduct only 70 percent in the first year. This deduction is worth $12.5 billion over the next 10 years, according to the AP report.

 

[barfo]

Intangible Drilling Costs

This allows for the deduction of costs associated with drilling, such as those for labor and exploration. API says that this deduction is “no different than the policy behind and treatment of R&D costs for other industries” and notes that while small, independent companies (not targeted by the Senate legislation) can deduct all of these expenses in the first year, bigger, integrated companies can deduct only 70 percent in the first year. This deduction is worth $12.5 billion over the next 10 years, according to the AP report.

What does API stand for, Mr. Supposed Skeptic?

barfo

 

[Denny Crane]

What does API stand for, Mr. Supposed Skeptic?

barfo

Who cares. Is it true or not that the deduction is similar in concept to R&D costs of other industries?

It is true.

http://en.wikipedia.org/wiki/Research_&_Experimentation_Tax_Credit

 

[barfo]

Who cares. Is it true or not that the deduction is similar in concept to R&D costs of other industries?

It is true.

http://en.wikipedia.org/wiki/Research_&_Experimentation_Tax_Credit

Sorry, no, it's not true. You've been sold a bridge by the American Petroleum Institute, which, as you may know, are lobbyists for the oil companies.

There are no tax breaks for oil companies.

Are you paid by Big Oil, Denny? Your claim is obviously and clearly untrue.

In The Tax Act of 1986 Congress extended special favor to those who participate in oil and gas ventures. The tax act allows for Intangible Drilling Costs (IDC’s - labor, chemicals, mud, grease, etc.), which are typically 70% to 90% of the cost to drill a well, to be written off the taxable year, expensed against ordinary income. These deductions are available in the year the money was invested, even if the well does not start drilling until March 31 of the year following the contribution of capital. (See Section 461 (i) (2) of the Tax Code)

Furthermore, Tangible Drilling Costs (TDC’s – well equipment, storage tanks, pump jacks, etc.), typically 10% to 30% of the cost to drill a well, are 100% tax deductible as a depreciation expense over a seven year period using the Accelerated Cost Recovery System (ACRS). (See Section 263 of the Tax Code)

Lease costs (purchase of leases, minerals, etc.), sales expenses, legal expenses, administrative accounting, and Lease Operating Costs (LOC’s) are also 100% tax deductible in the year they were incurred.

For tax years ending after August 8, 2005, any Geological and Geophysical (G&G’s) expenses paid or incurred in connection with the exploration for, or development of, oil or gas within the United States (as defined in Code section 638) may be amortized ratably over the 24-month period beginning on the date the expenses are paid or incurred. (See Section 167 (h) (1) of the Tax Code)

Combined, these incentives add up to a 100% write off against ordinary income.

Additionally, the tax code specifically states that a Working Interest in an oil and gas well is not a “passive” activity; therefore, deductions can be offset against income from active stock trades, business income, salaries, and so forth. (See Section 469 (c) (3) of the Tax Code)

If you’re involved in a dry-hole well you qualify for a 100% write-off of all costs, intangible and tangible alike, in the first year. Dry-hole costs are typically deducted on Schedule C or Form 1065 and are NOT subject to the usual $3,000 limit. These costs, when reported, should still be broken down by intangible, tangible and lease costs.

Another benefit, a small producer’s tax exemption known as the “Percentage Depletion Allowance” allows for 15% of the Gross Income (NOT Net Income) from an oil and gas producing property to be tax-free. Enacted by the 1990 Tax Act, this exemption was specifically designed to encourage participation in oil and gas drilling. This tax benefit is not available to any entities or individuals owning more than 1,000 barrels of oil or 6,000,000 cubic feet of gas average daily production.

I took that text from the website of an oil company.

barfo

 

[Denny Crane]

Those things are COGS to other businesses. Chemicals, fluids, etc.

Apple gets to fully deduct the cost of the glass, metals, and components in every iPhone sold, for example.

Without the fair tax treatment, those Jimmy Carter era gas lines would have continued for 30 years.

 

[barfo]

Those things are COGS to other businesses. Chemicals, fluids, etc.

Apple gets to fully deduct the cost of the glass, metals, and components in every iPhone sold, for example.

Without the fair tax treatment, those Jimmy Carter era gas lines would have continued for 30 years.

Ah, so we've gone from 'oil companies get no tax breaks' to 'oil companies deserve tax breaks, it's only fair'.

The American Petroleum Institute has taught you well, oily grasshopper.

barfo

 

[SlyPokerDog]

Or dig a hole to China.

If you drilled a tunnel through the Earth and jumped in, it would take you about 42-53 minutes to get to the other side.

 

[Denny Crane]

Ah, so we've gone from 'oil companies get no tax breaks' to 'oil companies deserve tax breaks, it's only fair'.

The American Petroleum Institute has taught you well, oily grasshopper.

barfo

The government wrote checks for $500M to Solyndra. It cut checks for at least 1/3 of Magnifier's solar panels, and he almost certainly could afford them without those checks.

You seem to think all the money is the government's and what it chooses to let us have is it spending or something. By your logic, the government not taxing them at 36% instead of 35% is a tax break.

 

[Denny Crane]

http://www.forbes.com/sites/davidbl...tax-provisions-are-not-subsidies-for-big-oil/

 

[barfo]

http://www.forbes.com/sites/davidbl...tax-provisions-are-not-subsidies-for-big-oil/

Now we are moving from 'there are no tax breaks for oil companies' to 'there aren't any really big tax breaks for big oil companies'.

It's true - the tax breaks for small oil companies are bigger than the tax breaks for big oil companies.

barfo

 

[Denny Crane]

Now we are moving from 'there are no tax breaks for oil companies' to 'there aren't any really big tax breaks for big oil companies'.

It's true - the tax breaks for small oil companies are bigger than the tax breaks for big oil companies.

barfo

There are no tax breaks for oil companies that don't exist for every other company.

period.

You would quantify them writing off salary expense as a tax break.

 

[MarAzul]

Now we are moving from 'there are no tax breaks for oil companies' to 'there aren't any really big tax breaks for big oil companies'.

It's true - the tax breaks for small oil companies are bigger than the tax breaks for big oil companies.

barfo

What Tax breaks? People often say "Tax breaks" but never say what they mean?

 

[barfo]

What Tax breaks? People often say "Tax breaks" but never say what they mean?

Post #66 in this thread.

barfo

 

[barfo]

There are no tax breaks for oil companies that don't exist for every other company.

period.

Another benefit, a small producer’s tax exemption known as the “Percentage Depletion Allowance” allows for 15% of the Gross Income (NOT Net Income) from an oil and gas producing property to be tax-free.

How is that not a tax break for oil companies and only oil companies, Denny?

Do you really want to stand your ground here after being absolutely, conclusively proven wrong?

barfo

 

[Denny Crane]

Post #66 in this thread.

barfo

You know barfo, there actually are subsidies for big oil. The strategic oil reserve is one where government buys oil from the oil companies. There's also subsidies for the poor and elderly to buy heating oil in the winter.

Why do you want the poor and elderly to freeze? Let them eat cake?

 

[MarAzul]

Post #66 in this thread.

barfo

But for the depletion allowance, they all look like deductable costs of operations.

I suppose the depletion allowance is debatable, but it seems it was and incentive to drill.