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

To: J_F_Shepard who wrote (643998)	1/29/2012 3:41:07 PM
From: TimF	Read Replies (2) \| Respond to of 1580716

They are being subsidized because the government is helping they pay a certain amount of taxes that they would normally have to pay But the net flow of money is still to the government, so they are subsidizing the government not the other way around (assuming they have a recognized profit that they pay taxes on, and the subsidy either isn't refundable credits, or is smaller than the tax payment). If it makes you feel better call them "targeted tax breaks" like when you are allowed to deduct your mortgage interest from your taxes. Works for me. Are the oil companies losing money? Mostly not. Why do you ask?

To: J_F_Shepard who wrote (643998)	1/29/2012 5:03:02 PM
From: i-node	1 Recommendation Read Replies (1) \| Respond to of 1580716

>>> Allowing businesses to deduct various expenses is a tax break that you or I don't get....especially those that given to specific people of business by an act of law....could just all be called a subsidy... If we are in business we certainly do. IN fact, the applicable section of the Internal Revenue Code (§162(a)) defines these deductions for you, me, and Exxon all in the same code section. It begins -- "There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business" It doesn't say anything about different rules for you, me, or Exxon. There is a great deal of litigation about what is "ordinary" and "necessary" and "trade or business", but there is relatively little about whether such expenses are deductible or by whom. In fact, absent a provision to the contrary, all such expenses are deductible. So, the code goes on to preclude deductions that are NOT allowed (provided they meet the other criteria). If a person, or Exxon, can show they are engaged in a trade or business and that a business expense is both ordinary and necessary and that it was incurred during the taxable year and it isn't precluded by some other provision it is deductible. Period. Now, some costs, like capital expenditures, are not "business expenses"; these are handled by the applicable code sections for depreciation and amortization. There are times when Congress has decided to modify the way in which these costs are deducted. Usually, it is in terms of "accelerated" deductions to provide incentive for businesses to spend their money in a particular manner. Section 179 is a good example, but there are hundreds of them. I can assure you there are 100s of them that apply to IBM as well as to Exxon. And there are provisions that apply to small businesses only. As Brummer pointed out, practically all of the so-called subsidies are not subsidies at all, they are merely changes to the timeline during which an expenditure can be written off. This is in contrast to provisions attacking the oil industry which have from time to time been deployed. For example, the "Crude Oil Windfall Profits Tax" -- which effectively singled out the oil industry and imposed an arbitrary excise tax on them. Have you ever been singled out to pay a special tax because of the industry YOU worked in? This is all one BIG FAT LIE. There are no subsidies. For the most part, these are deductions that they would be allowed under any circumstances as either ordinary and necessary business expenses or under other provisions of the law, just as every other business would be.