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So now the Republicans have a chance to get rid of the tax breaks for these guys. I expect the checks from Big Oil will start rolling on this one. Beaner might even hand them out again!
Use your head. It isn't just the right that allows this to go on. Republicans and Democrats are all the same behind closed doors. Smoking cigars, drinking scotch and lauging at us as we bicker at eachother as the money rolls in. If they wanted to fix these problems they would have by now. Also they all wear monocles too Im sure. Republicrats is all they are. No real change just a little here on once side then a little here on the other side. Throwing us all a few bones from time to time. But nothing really changes. Hmmmmm wonder why not?
Obama has already laid down the gauntlet and is obviously ready to get this done. Will Boehner and the GOP allow him?
Use your head. It isn't just the right that allows this to go on. Republicans and Democrats are all the same behind closed doors. Smoking cigars, drinking scotch and lauging at us as we bicker at eachother as the money rolls in. If they wanted to fix these problems they would have by now. Also they all wear monocles too Im sure. Republicrats is all they are. No real change just a little here on once side then a little here on the other side. Throwing us all a few bones from time to time. But nothing really changes. Hmmmmm wonder why not?
Obama has already laid down the gauntlet and is obviously ready to get this done. Will Boehner and the GOP allow him?
On Monday, Boehner veered off of the GOP talking points about gas prices by even considering the tax cuts, and while the speaker’s office is already backtracking, the Democrats know a political opening when they see it.
Monday, Boehner walked into the trap, telling ABC News that oil companies are “gonna pay their fair share in taxes and they should.” Boehner suggested the oil depletion allowance could be the first to go.
Yeah I agree that there is so much profit involved that they really don't need more incentative to perform certain types of drilling or whatever else.
What "incentives" do they receive? Please enumerate.
Boehner's office is trying to backpedal furiously LOL
Dems jump on Boehner gas tax comments - Dan Berman - POLITICO.com
On Monday, Boehner veered off of the GOP talking points about gas prices by even considering the tax cuts, and while the speakers office is already backtracking, the Democrats know a political opening when they see it.
Monday, Boehner walked into the trap, telling ABC News that oil companies are gonna pay their fair share in taxes and they should. Boehner suggested the oil depletion allowance could be the first to go.
“I was heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies for the oil and gas industry,” Obama wrote. “Our political system has for too long avoided and ignored this important step, and I hope we can come together in a bipartisan manner to get it done.”
Yeah I agree that there is so much profit involved that they really don't need more incentative to perform certain types of drilling or whatever else.
What "incentives" do they receive? Please enumerate.
President replies to Boehner's remark:"I hope we can all agree that, instead of continuing to subsidize yesterday's energy sources, we need to invest in tomorrow's," Obama said.
Sen. Charles Schumer (D-N.Y.) also seized on Boehner's remarks, saying his comment that large companies don't "need to have" some subsidies was "almost too good to be true."
Yeah I agree that there is so much profit involved that they really don't need more incentative to perform certain types of drilling or whatever else.
What "incentives" do they receive? Please enumerate.
Here's a fact sheet regarding "Intangible Drilling Costs" mentioned in my earlier post:
http://www.ipaa.org/issues/factsheets/tax_capital/2009-03-IntangibleDrillingAndDevelopmentCosts.pdf
Incentives? Maybe an incentive to spend money on an economic activity.
As with any of these "subsidies" an oil company must first spend money toward a venture.
That money spent is deducted as a business expense from taxable income.
In effect, by disallowing these deductions the government proposes to penalize economic activity.
Thanks Boehner!!!
Obama pounces on Speaker's remarks, urges end to oil subsidies - The Hill's E2-Wire
"I hope we can all agree that, instead of continuing to subsidize yesterday's energy sources, we need to invest in tomorrow's," Obama said.
Sen. Charles Schumer (D-N.Y.) also seized on Boehner's remarks, saying his comment that large companies don't "need to have" some subsidies was "almost too good to be true."
Yeah I agree that there is so much profit involved that they really don't need more incentative to perform certain types of drilling or whatever else.
What "incentives" do they receive? Please enumerate.
The only incentive I know of in reference to the oil and gas industry is percentage depletion. Basically, a company can deduct, over time, more in depletion expenses than the actual amount of their capital outlays. But it's only for small, independent, domestic production. You'll hear everyone on this board piss and moan about energy independence. At the same time they'll piss and moan about "oil subsidies" which are limited almost entirely to the percentage depletion method which is meant to encourage small, independent, domestic production.
What "incentives" do they receive? Please enumerate.
The only incentive I know of in reference to the oil and gas industry is percentage depletion. Basically, a company can deduct, over time, more in depletion expenses than the actual amount of their capital outlays. But it's only for small, independent, domestic production. You'll hear everyone on this board piss and moan about energy independence. At the same time they'll piss and moan about "oil subsidies" which are limited almost entirely to the percentage depletion method which is meant to encourage small, independent, domestic production.
"Depletion" is just legalspeak for depreciation of the asset (oil lease). All businesses are allowed to deduct for depreciation of assets. Why should the oil industry be any different?
What "oil subsidies?" I've never heard of anything resembling a subsidy that the oil companies receive. In fact, the oil companies pay billions in extortion to the government every year.
Please provide at least one example of a so-called "subsidy."
April 26, 2011
"Congress should consider multibillion dollar subsidies to oil companies amid rising concern over skyrocketing gas prices, =House of Representatives Speaker John Boehner said on Monday.
"It's certainly something we should be looking at," Boehner said in an ABC News interview. "We're in a time when the federal government's short on revenues. They ought to be paying their fair share."
"Everybody wants to go after the oil companies and frankly, they've got some part of this to blame," he said.
But Boehner said he also wanted to "see all the facts" first.
Boehner's remarks echoed concerns expressed this month by President Barack Obama, who asked Congress to repeal $3.6 billion in annual oil, natural gas and coal subsidies, a move that would total $46.2 billion over a decade and help pay for clean energy initiatives.
But Boehner's comments go against Republican orthodoxy because the party traditionally is very supportive of the oil and gas industry and rejects most policies that would raise the costs of domestic energy production."
1. Intangible drilling costs. Firms engaged in the exploration and development of oil or gas properties may expense (deduct in the year paid or incurred) certain types of drilling expenditures from their taxes. These costs include wages, fuel, repairs, hauling, and supplies related to and necessary for drilling and preparing wells for the production of oil and gas. Other companies incurring similar types of costs must recover this cost over the life of the investment. The administration expects that eliminating this subsidy will produce budget savings of about $7.839 billion over 10 years.
2. Deduction for tertiary injectants. Tertiary, or enhanced oil recovery, methods increase the amount of oil that a company can extract from a well by an additional 5 percent to 15 percent according to some research. This tax expenditure subsidizes the costs of tertiary injectantsthe fluids, gases, and other chemicals that are pumped into oil and gas reservoirs as part of this process. The subsidy essentially gives companies government money for acting in ways that will enhance their profits. It allows companies to expense the costs of tertiary injectants, even though such costs should be recovered over time. Companies can alternatively choose to deduct these costs as an intangible drilling cost.The administration expects that eliminating this subsidy will produce budget savings of about $67 million over 10 years.
3. Percentage depletion allowance. Percentage depletion allows an independent oil company to deduct from its taxes about 15 percent from the revenue generated from a well, even if that amount exceeds the wells total value. This means that oil companies take a deduction as long as a well is producing oil, without regard to how much, or whether, the well is still declining in value. Companies in other industries are only allowed to deduct an amount that represents the decline in their investments value that year. The administration expects that eliminating this subsidy to produce budget savings of about $10 billion over 10 years.
4. Passive investments. The government generally only allows investors to deduct a limited amount of losses from passive activities such as renting land in order to prevent tax shelters. Yet oil and gas properties are exempt from this rule. This gives oil and gas companies a competitive edge over other types of energy companies. The administration expects that eliminating this subsidy will produce budget savings of about $180 million over 10 years.
5. Domestic manufacturing tax deduction. Companies that manufacture, produce, or extract oil and gas or any primary derivative receive a manufacturing subsidy provided that the product was made in the United States. But since removing this subsidy does not affect the production of oil, the subsidy does not significantly affect business decisions and eliminating the subsidy would not affect consumer prices. The subsidy is essentially a throwaway for oil companies. The tax expenditure is provided through a deduction for 9 percent of income, subject to a limit of 50 percent of the wages paid that are allocable to domestic production during the taxable year. The administration expects that eliminating this subsidy will produce budget savings of about $17.3 billion over 10 years.
6. Geological and geophysical expenditures. The Energy Policy Act of 2005 created this tax subsidy, which allows companies to deduct the costs associated with searching for oil, recovering the costs over a two-year period. The administration expects that scaling back the amortization period to seven years would produce budget savings of about $1.1 billion over 10 years.
7. Foreign tax credit. This credit is intended to prevent the double taxation of income that is taxed abroad but also subject to tax in the United States. Yet companies, particularly oil companies, have managed to exploit this subsidy even when they dont pay income taxes abroad. In total, adjusting the rule would prevent companies from avoiding about $8.5 billion in taxes over a 10-year period.
8. Enhanced oil recovery credit. Companies receive a 15 percent income tax credit for the costs of recovering domestic oil when they use enhanced oil recovery methods to extract oil that is too viscous to be extracted by conventional primary and secondary water-flooding techniques. The EOR credit is nonrefundable and is allowed if the average wellhead price of crude oil (using West Texas Intermediate as the reference) in the year before the credit is claimed is below the statutorily established threshold price of $28 (as adjusted for inflation since 1990) in the year the credit is claimed. Oil prices in fiscal year 2006 were too high for companies to receive this subsidy, but the subsidy remains in existence. Its elimination is not expected to produce budget savings.
9. Marginal well production. This provision provides a subsidy for oil and gas produced from certain types of oil and gas wells. These wells include those that produce heavy oil and those with an average production within a statutorily specified range. Oil prices were too high for companies to receive this subsidy in fiscal year 2006, but the subsidy remains in existence. Its elimination is not expected to produce budget savings.
The total government savings from eliminating these subsidies is projected to be $45 billion over 10 years.
Halliburton Brings In Record $5.3 Billion In First Quarter, Credits Increased U.S. Oil Production Under Obama
Wait...I thought Obama was anti-business, anti-oil, blah, blah, blah...
