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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (612393)	5/21/2011 9:55:54 PM
From: J_F_Shepard	Read Replies (1) \| Respond to of 1583965

As Oil Industry Fights a Tax, It Reaps Subsidies By DAVID KOCIENIEWSKI July 3, 2010 When the Deepwater Horizon drilling platform set off the worst oil spill at sea in American history, it was flying the flag of the Marshall Islands. Registering there allowed the rig’s owner to significantly reduce its American taxes. The owner, Transocean, moved its corporate headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland in 2008, maneuvers that also helped it avoid taxes. At the same time, BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon — a deduction of more than $225,000 a day since the lease began. With federal officials now considering a new tax on petroleum production to pay for the cleanup, the industry is fighting the measure, warning that it will lead to job losses and higher gasoline prices, as well as an increased dependence on foreign oil. 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. nytimes.com

To: i-node who wrote (612393)	5/22/2011 10:21:39 AM
From: jlallen	2 Recommendations Respond to of 1583965

Its the booze....sheppy is an ignorant drunken slob.

To: i-node who wrote (612393)	5/23/2011 10:29:20 PM
From: J_F_Shepard	Read Replies (2) \| Respond to of 1583965

You want some handouts named....here is something Brumey posted which lists a whole bunch.... He didn't' give a link... "eliminate the DOE altogether. Then you can save a lot more. Government R&D. The Department of Energy (DOE) has spent taxpayer dollars on oil research and development, including funding for unconventional oil, gas, and coal. Although President Obama’s FY 2012 budget request significantly cuts funding for the Office of Fossil Energy, decreasing its size by $417.8 million below the FY 2010 appropriation, it does not go far enough. The only funding in this area should maintain the Strategic Petroleum Reserve, for which the President’s budget requests an appropriate $121.7 million. Eliminating all other fossil energy funding would save $399 million. EOR - Irrelevant now anyway. Go ahead, wipe it out. Enhanced Oil Recovery (EOR) Tax Credit. Oil producers receive a 15 percent tax credit for costlier methods and technologies, such as injecting liquids and carbon dioxide into the earth. Many EOR processes are no longer in use, and the tax credit applies only when the price of oil falls below a certain level. Marginal well - OK, eliminate this too. Shut down the stripper wells owned by small companies. Screw US production. Liberals want us to import more. Marginal Well Production Credit. Marginal wells produce 15 or fewer barrels of oil per day, produce heavy oil, or produce mostly water and fewer than 25 barrels of oil per day. The marginal well production credit is another safety-net tax provision. This is another preferential tax credit that Congress should repeal. % depletion - Integrated oil companies haven't gotten this for decades. Go ahead, soak the little companies and the ranchers, farmers and other royalty owners. Percentage depletion Companies are generally allowed to deduct the costs of an investment over the term of that investment’s useful life. But oil companies get to use a special method for calculating their deductions called “percentage depletion.” Instead of deducting the costs of an oil or gas well as its value declines, oil companies are allowed to deduct a flat percentage of the income they derive from it. Because the deductions are based on revenues, not costs, the subsidy actually increases at times when prices are high, which of course is when oil companies enjoy their greatest profits. The oil and gas industry maintains that this is not a special tax break because other companies receive similar deductions. But the percentage depletion method permitted for oil and gas is fundamentally different and more favorable. In some cases, it can eliminate all federal taxes for these companies. Moreover, percentage depletion is a poorly designed subsidy because it “doesn’t specifically target hard-to-find or difficult-to-extract oil,” as CAP’s Richard Caperton and Sima Gandhi have written. Mfg deduction - why discriminate against oil and gas - they're arguing below that oil and gas production can't be moved abroad like manufacturing - RU kidding? Sure it can. Lets not kid - thats the policy goal here. Domestic manufacturing deduction for oil production Oil producers successfully lobbied for inclusion in a 2004 bill that gave the beleaguered manufacturing sector a special tax break designed to discourage outsourcing of jobs. For a number of reasons—including the capital-intensive nature of oil production, the relative mobility of investments, and of course the level of profitability—there are vast differences between the oil industry and traditional U.S. manufacturing. As Sen. Bob Corker, a Tennessee Republican, has explained: “Congress was trying to solve a manufacturing issue in this country” by enacting the deduction and included oil producers “almost inadvertently.”[4] Whatever rationale there was for allowing oil producers to claim the manufacturing deduction has evaporated in the intervening time, as oil prices have nearly tripled. Eliminating oil producers from a benefit never intended for them “will have no effect on consumer prices for gasoline and natural gas in the immediate future,” and is unlikely to have any effect over the long run, according to a recent report by Congress’s Joint Economic Committee. IDC - just beware that just like the mfg deduction, this will lower domestic production and mean more imports - marginal wells over time will not be drilled. Of course, thats the liberal goal. Drill in Brazil, not here. Expensing of intangible drilling costs Another special tax rule dating back to 1916 permits independent oil companies (and major integrated oil companies to a lesser but still significant extent) to “expense” certain costs associated with drilling oil wells. This means they can take immediate deductions for these costs rather than spreading the deductions out over the useful life of the wells, which is the normal tax code rule for other types of investments. Taking deductions immediately means the companies lower their tax bill in the first year, in effect getting an interest-free loan from the government. Foreign tax credit - this will put US multinationals at a disadvantage to foreign ones when operating abroad. Would it mean the US multinationals would move abroad, spin off their intl operations as separate companies? Don't know - this is just aimed at hurting the US o&g industry and the US. Dual capacity taxpayer” rules for claiming foreign tax credits Our tax system allows companies that do business abroad to reduce from their tax bill any income taxes paid to other governments. The rules are supposed to prevent oil companies from claiming credit for royalty payments to foreign governments. Royalties are not taxes; they are fees for the privilege of extracting natural resources. What are payments to foreign govts - royalties or taxes? Notwithstanding these rules, so-called “dual capacity taxpayers,” which are overwhelmingly oil companies, have been permitted to claim credits for certain payments to foreign governments, even in countries that generally impose low or no business tax (suggesting that these payments, or levies, are in fact a form of royalty).[5] Dual capacity taxpayer rules, therefore, are a subsidy for foreign production by U.S. oil companies. President Obama and others have proposed limiting the tax credit for these companies to what it would be if they did not have the special “dual capacity taxpayer” status.