Absolutely. But I'm afraid it's Pubcrappe. I'm always asking for links. Links?
JUL 7, 2013 @ 10:00 AM 6,904 VIEWS
It's Time To Sequester Green Energy Subsidies, Not Mythical Oil And Gas Tax Breaks
"Using a very broad definition applied by Oil Change International, the term “subsidies” refers to: “any government action that lowers the cost of fossil fuel energy production, raises the price received by energy producers, or lowers the price paid by consumers.” So based upon the first of these criteria, let’s assume that the president is referring to three types of oil and gas company tax “loopholes”: 1) an oil depletion allowance; 2) expensing drilling costs; and 3), a credit for taxes paid to foreign nations during foreign operations (a foreign tax credit). Yet in one form or another, these same advantages are extended to other industries as well, and often with more generous benefits.
Oil depletion allowances, the first category, principally apply to small independent producers, with similar benefits available for all mineral extraction, timber industries, etc., allowing them to pass the depletion on to individual investors. Large integrated corporations haven’t been eligible for these since the mid-1970s. Expensing indirect drilling costs involves writing off expenses in the year incurred rather than capitalizing them and writing them off over several years. Closing this “loophole” would only change the timing of taking he expense, not the total amounts of the so-called “subsidy”. The third category, a tax credit for taxes paid to foreign nations, is available for all international companies. This provides an offset to foreign taxes, often paid as royalties, so that the companies aren’t taxed twice on the same income.
The oil and gas extraction and refining has already been singled out to receive even fewer tax breaks than other industries. Whereas Section 199 of the “American Job Creation Act of 2004” provides a 9% deduction from net income for businesses engaged in “qualified production activities”, oil and gas was penalized and limited to a 6% deduction. Passed with strong bipartisan congressional support, the intent was to provide a competitive advantage to domestic companies engaged in product manufacturing, sales, leasing or licensing, and production-related software activities.
Many manufacturing industries, including farm equipment, appliances and pharmaceuticals take advantage of the full Section 199 deduction. Even highly profitable companies like Microsoft and Apple get those breaks, as do some foreign companies that operate factories in the U.S."
It's Time To Sequester Green Energy Subsidies, Not Mythical Oil And Gas Tax Breaks