Re: Should the U.S. government subsidize the construction of nuclear power plants?
It's in the link. It shows the advantage they share from their lobbying of Congress, the ultimate low tax rates they fall under which are exceedingly lower than other business. As for the other lack of proper regulation thing.
https://www.nytimes.com/2008/09/11/washington/11royalty.html
This, BTW, is from the second link I provided that you wouldn't read (though I thought you wanted to get to the bottom of it)
But an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.
According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.
And for many small and midsize oil companies, the tax on capital investments is so low that it is more than eliminated by var-ious credits. These companies’ returns on those investments are often higher after taxes than before.
“The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant,” said Senator Robert Menendez, Democrat of New Jersey, who has worked alongside the Obama administration on a bill that would cut $20 billion in oil industry tax breaks over the next decade. “There is no reason for these corporations to shortchange the American taxpayer.”
Oil industry officials say that the tax breaks, which average about $4 billion a year according to various government reports, are a bargain for taxpayers. By helping producers weather market fluctuations and invest in technology, tax incentives are supporting an industry that the officials say provides 9.2 million jobs.
The American Petroleum Institute, an industry advocacy group, argues that even with subsidies, oil producers paid or incurred $280 billion in American income taxes from 2006 to 2008, and pay a higher percentage of their earnings in taxes than most other American corporations.
As oil continues to spread across the Gulf of Mexico, however, the industry is being forced to defend tax breaks that some say are being abused or are outdated.
The Senate Finance Committee on Wednesday announced that it was investigating whether Transocean had exploited tax laws by moving overseas to avoid paying taxes in the United States. Efforts to curtail the tax breaks are likely to face fierce opposition in Congress; the oil and natural gas industry has spent $340 million on lobbyists since 2008, according to the nonpartisan Center for Responsive Politics, which monitors political spending.
But some government watchdog groups say that only the industry’s political muscle is preserving the tax breaks. An economist for the Treasury Department said in 2009 that a study had found that oil prices and potential profits were so high that eliminating the subsidies would decrease American output by less than half of one percent.
“We’re giving tax breaks to highly profitable companies to do what they would be doing anyway,” said Sima J. Gandhi, a policy analyst at the Center for American Progress, a liberal research organization. “That’s not an incentive; that’s a giveaway.”
Some of the tax breaks date back nearly a century, when they were intended to encourage exploration in an era of rudimentary technology, when costly investments frequently produced only dry holes. Because of one lingering provision from the Tariff Act of 1913, many small and midsize oil companies based in the United States can claim deductions for the lost value of tapped oil fields far beyond the amount the companies actually paid for the oil rights.
Other tax breaks were born of international politics. In an attempt to deter Soviet influence in the Middle East in the 1950s, the State Department backed a Saudi Arabian accounting maneuver that reclassified the royalties charged by foreign governments to American oil drillers. Saudi Arabia and others began to treat some of the royalties as taxes, which entitled the companies to subtract those payments from their American tax bills. Despite repeated attempts to forbid this accounting practice, companies continue to deduct the payments. The Treasury Department estimates that it will cost $8.2 billion over the next decade.
Over the last 10 years, oil companies have also been aggressive in using foreign tax havens. Many rigs, like Deepwater Horizon, are registered in Panama or in the Marshall Islands, where they are subject to lower taxes and less stringent safety and staff regulations. American producers have also aggressively exploited the tax code by opening small offices in low-tax countries. A recent study by Martin A. Sullivan, an economist for the trade publication Tax Analysts, found that the five oil drilling companies that had undergone these “corporate inversions” had saved themselves a total of $4 billion in taxes since 1999.
Thank you!!!!!!! You could have saved us a lot of time had you just posted this when requested. I read the first article and since it did not tell me anything useful, I wasn't going to waste my time. Now, let's review the item above:
First paragraph does not address my quest.
The second one says this:
According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry. The key word here is like. I am not a CPA or a tax attorney. So, my question about this paragraph is can other industries deduct "capital investments." My guess is they can. If I am correct, then this paragraph is misleading.
The third paragraph gets the same comments as the second.
Paragraph 4 doesn't say that the breaks are only for oil companies.
Paragraph 5 comments are the same as 4.
Paragraph 6 states that there are subsidies, but do not list any. Interesting, that paragraph states the reverse of prior claims with regards to percentage of taxes paid. I'll wait to see if the article disputes this.
Paragraph 7 states nothing useful.
Over half way through the article and nothing useful yet.
Paragraph 8 states nothing useful.
Paragraph 9 states nothing useful.
Paragraph 10 states nothing useful.
Paragraph 11 finally states a subsidy. Okay, we now have one. How much is that subsidy worth in further tax revenues?
Paragraph 12 states a 2nd subsidy. Okay, let's eliminate that one. That is worth $820,000 million a year. Cool.
Paragraph 13 states nothing useful.
It now appears that we have found two subsidies and we know that the NY Times says it is worth $820 million per year for the one, but gives no figure for the other. You could have saved me a great deal of time by posting only the relevant portions of the article.
I am fine with doing away with the two and any others that someone may provide. However, if we do away with these subsidies, then I think we ought to do away with all subsidies for all businesses. My question is why are you interested only in picking on the oil industry? No CEO of oil was even alive when one of the two identified subsidies was enacted. Why are we blaming the oil companies? Shouldn't the blame fall at the feet of those who passed those subsidies, i.e. Congress? Are people all bent out of shape about the oil companies because of the price of gasoline at the pumps? If so, maybe the anger should be vented towards state and federal governments rather than the oil companies. They get more per gallon than does the oil company.