Quote:
Originally Posted by nwarounder
That's entirely false, if you look at the tax breaks in the IRS code and relate them to what Obama was trying to repeal, you will see they do get additional breaks that do not relate to other industries. Keep in mind, I am for big oil and any big company, I'm just opposed to the idea congress is smart enough to decide who should get a tax break, when and why.
Limits or repeals certain tax benefits for major integrated oil companies (defined as companies with annual gross receipts over $1 billion and an average daily worldwide production of crude oil of at least 500,000 barrels), including: (1) the foreign tax credit; (2) the tax deduction for income attributable to oil, natural gas, or primary products thereof; (3) the tax deduction for intangible drilling and development costs; (4) the percentage depletion allowance for oil and gas wells; (5) the tax deduction for qualified tertiary injectant expenses. Amends the Energy Policy Act of 2005 to repeal royalty relief (suspension of royalties) for: (1) natural gas production from deep wells in shallow waters of the Gulf of Mexico; and (2) deep water oil and gas production in the Western and Central Planning Area of the Gulf (including the portion of the Eastern Planning Area encompassing whole lease blocks lying west of 87 degrees, 30 minutes west longitude).
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the oil companies create thousands upon thousands of jobs, pay billions in taxes, their employees pay billions more, compete against government owned companies at great disadvantage the world over, have done more to help america become the greatest economic power in the world than just about any other industry you can think of, and obama and related idiots constantly attack them.
heres what you need to keep in mind, there is not one deduction unless money is spent, there is no deduction EVER in excess of money spent. the whole thing is a matter of timing. when you can deduct something.
And here is the other side of the coin, did you ever think about the fact that for every tax deduction you get, because you spent the money, someone else has income equal to your deduction? so where is the loss to the government? nowhere actually, except if you can't write off your expenses and they can still tax the person you paid. its a matter of timing. if you spend money and thereby create taxable income to the person you pay and at the same time you cant offset your income by that expense? well hell yeah the government loves that. the whole thing is about timing
except two things:
a. domestic activities deduction- which every company that makes something gets, if done domestically
b. statutory depletion, which NOT one big oil company gets.
1. FOREGN TAX CREDIT
every one gets that. you get it if you pay foreign tax. hell if you took a job in saudia arabia the first $90,000 you make is tax free.
if you have dividend income and they take out foreign tax because it was a foreign company? (which they do all the time) you get that as a credit on your Form 1040
why is that associated as a subsidy to oil when everyone gets that?
countries have entered into tax treaties so that their citizens are protected, and if the foreign country is part of the treaty and you pay tax there you get to offset the income tax here by that tax within certain parameters.
BIG HOLLYWOOD GETS THAT
2. Deduction attributable to oil and gas production?
unless its operating expenses,
the only thing i can think of here is depletion, statutory, which they DO NOT GET
so they can deduct operating expenses????
what are you talking about here, i know you just went somewhere and copied some boiler plate so asking you what this is is sort of unfair. but what is it?
BIG HOLLYWOOD GETS TO WRITE OFF THEIR OPERATING EXPENSES
3. IDC
idc is just money you spent on wells . you cannot go get it..you cant move it. you cant see it or touch it. its money spent and gone
so you get to deduct expenses? thats rich. IDC are costs incurred to drill wells, some wells are successful, many arent. IDC is the drilling costs on sucessful ones. it does not include the equipment used in drilling or equipment placed on the well once producing, those are tangible costs.
mining companies get the same thing for digging holes. they can deduct their mining expenses.
did you know that alternative minimum tax can be due on the right to deduct money you spent drilling? nah you didnt
did you know that integrated oil companies, just for the privilege of deducting their expenses in this area have to reduce their expenses by 30% and write that off over 60 months
did you know that IDC, intangible expenses, cannot be deducted on wells drilled outside the u.s.? nah you didnt. they are written off over ten years.
did you know that BIG HOLLYWOOD, they can write off the first $15,000,000 spent on making a movie, $20,000,000 if the movie is made in a depressed area? nah you didnt. thats per movie.
SO WHY PICK ON OIL COMPANIES? the answer is politics
4. Percentage Depletion Allowance????
thats laughable,. If you produce over 1,000 barrels of oil or its equivalent per day you DO NOT GET percentage depletion. did you know that? nah you didnt.
i produce almost that, thats 250 barrels of oil for 4 wells. or 50 barrels a day for 200 wells.
if your gross production to your interest is 1000 barrels a day at maybe $90 (which is about what you get) thats $90,000 per day. times 365 days thats $32,850,000 in a year. does exxon have more revenue in a year than $32 million? what the hell do you think?
exxon would laugh. im laughing. some independent producers of oil, very very very small independents get that, along with royalty owners only. even the bigger royalty owners cant get that.
5. tertiary production?
do you even have a clue want that is? nah you dont
primary is where the formation has pressure that allows the oil or gas to seep to the well bore in an effort to equalize the pressure. that allows you to get it up out of the ground.
secondary is where you have to go to extreme lengths to create a formational drive so the fluids can be pumped to the surface. you have to inject water or gas or some other drive, i have seen leases where they were fire flooded, you ignite the oil and gas at one end of the field to attempt to create pressure to drive the fluid to the production well bores.
tertiary? those are highly difficult and extreme methods of attempting to produce what never could be produced before. highly costly, high risk, replete with failure. so theres a tax deduction for that? so what? you have spent the money, i'd hope you could deduct it , you spent it. the government gets theirs if theres money to be made, and they wouldnt get a dime otherwise.
Additional
the royalty suspension?
i remember something abt that, but not a lot
it had something to do with, if you take the risk in this wildcat high risk deep water block, we will not charge you a royalty for a period of time.
has nothing to do with tax policy
