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Author Topic: Happy 100th anniversary to taxpayer subsidized gasoline. 1913- present. Back to Topics
Hannie59

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Appleton

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Message Posted: Mar 13, 2013 12:17:51 PM

Celebrating 100 years of oil subsidies from taxpayer dollars.

Let's continue to subsidize oil as the bashers complain that ETHANOL is the one that is subsidized. Only to the 1 percentile compared to your gasoline. Gasoline is energy negative as well. What a waste of your hard earned money.

[Edited by: Hannie59 at 3/13/2013 12:20:26 PM EST]
REPLIES (newest first) Post a Reply
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H_Holcomb
Rookie Author Pennsylvania

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Message Posted: Mar 26, 2013 12:37:06 PM

U.S. ethanol subsidies expired a year ago.
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borsht
Champion Author Oakland

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Message Posted: Mar 26, 2013 11:36:26 AM

tdioiler, this is the kind of economics that was taught when I was in college. They laughed at the socialist economics.
Government needs to get involved in huge infrastructure projects that the capital needed far surpasses what ordinary capital can do. Such as Interstate Freeways, huge water projects. Like California Acqueduct, Grand Coulle, Bonneville and Hoover dam projects. Not crap project like Solandra, and corn to ethanol projects which are only for political gain.
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tdioiler
All-Star Author Detroit

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Message Posted: Mar 24, 2013 10:50:34 PM

Just like the other renewable energy push by government, they are creating false markets that collapse on top of greed, poor business management, or corruption.

If these industries can make it, they will. But for the government to get involved by pushing a political agenda as hard as they do, we will just end up with more Solyndra cases coming up. Suntech is just another one to bite the dust.

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krzysiek_ck
Champion Author Illinois

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Message Posted: Mar 24, 2013 4:10:06 PM

brerrabbitTX wrote: "Already have"

Nice try. I showed you the list of tax specific subsidies with amount associated with them. Please do the same. Let's see the specific federal tax subsidies with amount associated with them for grain ethanol industry. Back it up with link(s).

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.

[Edited by: krzysiek_ck at 3/24/2013 4:14:47 PM EST]
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ggg452
Champion Author Manitoba

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Message Posted: Mar 24, 2013 2:59:41 PM

Wow...learning alot in this exchange...thanks...nice to see both sides...love it.
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brerrabbitTX
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Message Posted: Mar 24, 2013 2:53:22 PM

"brerrabbitTX, I'm still waiting for you to provide federal tax subsidies for grain ethanol industry."

Already have, Ethanol producers qualify for section 199 credits and take 9% of the cost of new equipment and manufacturing improvements in a tax credit each year they build new facilities.

Additionally the entire RFA is a tax subsidy because it forces others (in this case terminals, pipelines and retail stations) to spend large amounts of money to facilitate the sale of ethanol blended products. Ethanol industry sells more product and makes more money. Classic definition of a subsidy.

Finally you are once again showing your lack of business acumin and overall ability to microfocus instead of pulling your head out of the ethanol tank and totally ignoring the link I gave you to all the state money available to the ethanol world. Make no doubt about it ethanol gets a lot of sudsidies.

Whehter you want to admit it or not the facts show they do.

And finally you completely fail to acknowledge the fact that the alternate fuels and energy effciency market in this country will receive almost $13 billion in subsidies this year while elimination of all the oil subsidies would only mean $3 billion increase in oil companies taxes. I think you are just mad because all the other renewable energies are getting so much and your pet project ethanol won't get as much.

As far as what this thread is about or any of the others you are freely posting back and forth on, that bird has flown the nest and they are all starting to become one cross thread discussion so please stop beating that dead horse. You sound like a five year old repeating the same thing over and over.

Deal with the facts presented, make some arguements that are your own and please stop whinning.
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krzysiek_ck
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Message Posted: Mar 24, 2013 1:56:19 PM

brerrabbitTX wrote: "The discussion is centered on what is a tax treatment available to all US companies vs what is a target tax treatment to oil companies."

Wrong, what a surprise. This thread is about "Happy 100th anniversary to taxpayer subsidized gasoline. 1913- present.". You are the Big Oil Shill who is hi-jacking this thread and spinning it in a different direction. You were reminded multiple times to stay on the subject. You were also asked to open a new thread if you have an urge to discuss anything else than what this subject is about.
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krzysiek_ck
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Message Posted: Mar 24, 2013 9:09:25 AM

brerrabbitTX, I'm still waiting for you to provide federal tax subsidies for grain ethanol industry.
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Banjoe
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Message Posted: Mar 24, 2013 7:40:13 AM

Love the post brerrabbitTX. Folks get all excited when they think they've discovered tax 'cheats' and all we have to do is slam the loophole down and billions of dollars will magically appear. The reality is that these companies will switch business plans and these virtual dollars will never appear in public coffers. There will also be substantial reductions in program expansions including hiring going on as these businesses turn to more lucrative options to maintain their business operations.

I'm not sure where the concept of tax avoidance became a bad thing as I expect everyone on this site tries to limit their annual tax bill as much as possible and believe that it's their right to do so. For some reason, when a business does exactly the same thing, it's evil and anti-public good?
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brerrabbitTX
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Message Posted: Mar 23, 2013 9:14:58 PM

Latest numbers don't match yours

"New revenue estimates for the FY2013 proposed tax changes are $38.561 billion
over the next decade, contrasted with decade estimates of $43.6 billion in 2012, $36 billion in
2011, and $31 billion in 2010, for essentially the same proposed changes. Although these
proposals have failed to be implemented by Congress in previous years, the current atmosphere of
high federal deficits, record earnings by the major oil companies, and an increasing price of
gasoline might reduce resistance to increasing taxes on the industry."

Looks like according to these numbers from Washington the effect of the elimination of the tax benifits for oil companies would be $3.85 billiom a year in additional revenue. Not quite the $7.8 billion you refer to in your post. Additionally as the report states:

"Percentage depletion was eliminated for the major oil companies in 1975"

So what does that mean? It means that smaller independent companies and a whole lot of royalty owners (read landowners) taxes would go up. It would cost me personally $40,000 over ten years in additional taxes. It is estimated that almost half of the $11.5 billion this would raise for the feds over ten years would come from royalty owners, not oil companies.

Okay so that still leaves tax treatments for oil companies in the $32 billion range for the next ten years but take a look at what the Feds are giving to renewable energy today.

"In 2013, it’s estimated that $7.3 billion — 45 percent — in energy tax subsidies, will go towards renewable energy, according to Congressional testimony by Congressional Budget Office senior advisor Terry Dinan. Another $4.8 billion — 29 percent — in energy tax subsidies will be for energy efficiency.

In total, the federal energy tax subsidies will cost more than $16 billion in 2013, up from only $5 billion in 2005. Tax subsidies for fossil fuels make up 20 percent of the total and tax subsidies for nuclear power make up another seven percent."

Wait a minute, lets look at what that said $16 billion dollars in energy subsidies in 2013 and fosil fuels (remember that includes oil, natural gas, and coal) will receive 20% or $3.2 billion. And if you and Obama gets their Christmas wish fossil fuels will get nothing meaning the rest of the energy world will get $12.8 billion or 3 and 1/2 as much as fossil fuels get.

Does that sound right to you?

“Renewable energy subsidies have increased by 186 percent, with wind energy receiving a 10-fold increase and solar increasing by a factor of 6,” said Institute for Energy Research distinguished senior fellow Mary Hutzler in her Congressional testimony.

“Biofuel subsidies increased by 66 percent, and conservation subsidies increased from $369 million in 2007 to more than $6.5 billion in 2010,” she added. “Fossil fuels, also, have seen increased federal support — with coal subsidies increasing to $1.3 billion and oil and natural gas subsidies increasing to $2.8 billion. Nuclear energy subsidies increased 46 percent from $1.7 billion to $2.5 billion.”
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brerrabbitTX
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Message Posted: Mar 23, 2013 8:42:11 PM

And how much money does renewable energy get in the way of governmental tax breaks and subsidies?

[Edited by: brerrabbitTX at 3/23/2013 8:42:45 PM EST]
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Hannie59
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Message Posted: Mar 23, 2013 5:42:05 PM

Every year, the oil industry can expect to receive as much as $7 billion in government subsidies and an additional $800 million in tax breaks.

To give you an idea of how much money that is, $7 billion would pay the salaries of about 153,091 public school teachers.

This might be a winning strategy for the oil industry, but it’s a terrible one for Americans like you. Not only does it limit our choices, it also places more of the burden on working families.

In 2012 alone, the five biggest oil companies made a combined $118 billion in profits – and they still managed to pay a lower tax rate than the average American. They don’t need our help anymore.

Let’s stop paying to limit our own choices. Renewable fuel is the answer.

[Edited by: Hannie59 at 3/23/2013 5:43:27 PM EST]
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brerrabbitTX
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Message Posted: Mar 23, 2013 11:01:25 AM

"For every subsidy that ethanol gets or used to get "big oil" gets plenty more. Must a list them all, or are you afraid of the mud that will be in your face?"

Goldseeker, your a little late to the party. All the tax treatments that you and your friends want to spin into subsidies are listed in links further back in this thread so go do some reading get up to speed on the discussion and we can talk.

The discussion is centered on what is a tax treatment available to all US companies vs what is a target tax treatment to oil companies. The original links the oil bashers provided went after the big five oil comapanies but has now apparently spread from there all the way down to individuals like myself who receive oil raoyalty payment.

Section 199 is the most popular as it is always the first listed. You can take 9% of what you spend in the way of new manufacturing equipment as a tax credit in the year you spend the money. This tax treatment is available to all manufacturing concerns in the country. If you are an oil company you get to take a 6% tax credit. Any and all manufacturing assets built in the US since 2005 when this was enacted have used this provision of the tax code. This includes new ethanol plants built during this time as well as every other manufacturing assets built by anyone. For oil companies this includes each new well drilled with the stipulation that if no product is found then they do not get the credit for money spent on dry holes. Ethanol supporters call this a susidy, while I call it what it is part of the tax code congress put in place to encourage domestic investments, and can repeal anytime they want to.

Foriegn tax credits. This provision allows any company or individual that pays taxes to a foriegn country to take those taxes paid as a credit on their return. This is in keeping with the fundemental belief we should not pay taxes on taxes. I even utilize this provision on my tax returns because some of my investment portfolio includes stock in overseas markets.

Depletion allowance. The big 5 oil companies lost the ability to take these deductions in the 1980's. They don't currently get them so I am not sure how they can be called a subsidy to big oil. Remove the depletion allowance and that means that average people that receive oil royalty payments for wells that others have drilled on their property will pay more in taxes. Many of the people effected by this will be the very people ethanol supporters back, farmers who grow corn, and ranchers who feed what is left after making ethanol to their livestock. Heck it means that for someone like myself I would fund about $35 to $40 thousand of the $10.8 billion they say that this elimination would create over the next ten years. If it is eliminated so be it, but rest assured it will not effect big oil. It will effect people like me.

Finally I make the point and no one has said anything about it is the fact that the RFA is in fact a subsidy. By raising the amount of bio fuels required to be blended into motor fuel each year the government is in fact giving the ethanol and bio fuel industry market share and allowing them to sell more product and make more money. The forced increase means others have to build infrastructure, delivery systems, additional tanks, and install new blender pumps. In that regard I provide a link to what is available by state financially for those who install the pumps. Aince retail sites are owned by individual dealers and not the oil comapnies, big oil does nopt benifit from these forgivable loans, grants, and outright subsidies.

Finally, like it or not the oil industry employs over 9 million people in this country and pays taxes in many forms to local and state governments, as well as lots to the federal government in terms of payroll taxes. Every state gets taxes on oil and gas production. The numbers are huge. Focus on what you want but if oil did not fund the states to the extent they do, many of the state level subsidies that benifit ethanol would dry up as well.

Before you chant the mantra of ethanol gets no subsidies, look at the whole picture. It's not always what it seems and is vastly different from the spin that either side will put on it.

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krzysiek_ck
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Message Posted: Mar 23, 2013 9:07:59 AM

That is not what I have asked for, no problem. Let me revise.

Here are estimated federal tax subsidies for year(s) 2013, 2013-2017, 3013-2022 in millions of dollars.

Expensing of Intangible Drilling Costs - 3,490, 10,968, 13,902
Deduction for Tertiary Injectants - 7, 51, 100
Passive Loss Exception for Working Interests - 9, 47, 82
Percentage Depletion - 612, 5,029, 11,465
Domestic Manufacturing Deduction - 574, 4,877, 11,612

Oil and Natural Gas Industry Tax Issues in the FY2013 Budget Proposal

Since you claim Grain Ethanol industry receives same federal tax subsidies, please provide the specific revenue numbers associated with them. Let's compare the numbers to determine the amount of "mud on their hands".

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.

[Edited by: krzysiek_ck at 3/23/2013 9:10:56 AM EST]
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Banjoe
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Message Posted: Mar 23, 2013 7:46:38 AM

Excellent link brerrabbitTX.

Hopefully some folks here will actually read it.
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goldseeker
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Message Posted: Mar 23, 2013 4:48:54 AM

"Niether side of this argument of ethanol vs oil is without mud on their hands,"

For every subsidy that ethanol gets or used to get "big oil" gets plenty more. Must a list them all, or are you afraid of the mud that will be in your face?

[Edited by: goldseeker at 3/23/2013 4:49:39 AM EST]
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brerrabbitTX
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Message Posted: Mar 22, 2013 11:39:23 PM

"In this case you should not have any problems list federal grain ethanol tax subsidies. Let's see how many you can list and how much they are worth."

Already told you some they get at the Federal level.

Now you can go see what all is available at the state level via this site.
State by state renewable fuel grants, subsidies and tax breaks.

[Edited by: brerrabbitTX at 3/22/2013 11:42:21 PM EST]
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brerrabbitTX
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Message Posted: Mar 22, 2013 10:47:01 PM

Well funny you would mention it but ethanol plants that are built since they are considered manufacturing get Section 199 deductions, the same ones you want to take away from the oil companies. They also get a 3% higher rate that the oil companies as well.

And while you will never admit it but if you read your definitions of subsidies consider this. The RFA requires a higher ethanol use each year. We are currently hitting a blend wall where we cannot create enough RIN's to cover all we need. To achieve the additonal RIN totals, companies are having to spend money to install more tankage to move to 15% blends, retail sites are having to spend money to install new blender pumps etc. Who benifits from higher mandates? Ethanol producers because they sell more product and make more money. Classic definition of a subsidy, govermental action that benifits a segment of business.

And while you may duck and cover from subsidies once again you overlook the obvious and will say it's not the feds doing it so it doesn't count. Well it counts. Check out the number of subsidies, grants and forgivable loans available at the state level for retailers to install new blending dispensors. Once again the classic definition of a subsidy, governmental action to benifit a segment of industry. It creates more outlets for ethanol producers to sell their product and they make more money because of it.

Niether side of this argument of ethanol vs oil is without mud on their hands, I freely admit that because once again I look at the big picture. You on the other hand would never admit anything of the sort because your myopic focus on one thing, in this case subsidies, causes you to see nothing else.
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krzysiek_ck
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Message Posted: Mar 22, 2013 9:25:41 PM

brerrabbitTX wrote: "So your statement the ethanol industry does not have them and the oil industry does is flat out wrong. Every manufacturing concern in the country gets them including ethanol plants."

In this case you should not have any problems list federal grain ethanol tax subsidies. Let's see how many you can list and how much they are worth.

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.

[Edited by: krzysiek_ck at 3/22/2013 9:29:46 PM EST]
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FocusFree
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Message Posted: Mar 22, 2013 6:28:45 AM

The tax code has lots of built in subsidies for the energy industry. Bring on a flat tax, no exceptions, and the tax code legislation would be very simple to understand and administer.
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EvergreenON
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Message Posted: Mar 22, 2013 6:06:43 AM

Why do we still subside this polluters and profiteers
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brerrabbitTX
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Message Posted: Mar 21, 2013 11:29:58 PM

So if the goal in the end is to raise additional Federal revenue then why don't you support doing away with all deductions. Do away with the home mortgage deduction and the upside in terms of revenue would dwarf what you say big oil gets.

The domestic manufacturing deduction as I have said all along is adeduction available to every maufacturing company in America, not just oil companies. So is the federal government subsidizing all manufacturing companies in America, or just oil companies. Additionally it is a tax treatment that was only enacted in 2005 so it has not been around for 100 year, it's been seven.

The intangible costs allowing oil companies to take the full deduction of the costs of drilling wells in year one is in the end ijust a shuffling of dollars and the idea that it would raise additional tax revinues is both right and wrong. Right because it would do away with the deduction in the year you drill the well which means more taxes paid that year, however the depreciation of the costs would merely be spread over multiple years. So practically what would happen is the feds would collect more money in year one but less in years 2 through 7 and the total paid over the seven years does not significantly change.

Lastly the intangible drilling cost provisions greatest victory was to significantly increase domestic drilling over the past number of years which has produced oil from the Bakken formation in the Dakotas, Eagleford Shale in Texas and significant enhanced recoveries in West Texas. Like them or not the provisions served their purpose.

Also interesting in this version of get rid of oil company subsidies mentions nothing about the foriegn tax credit, primarily because the writer of this post understand s that those are freely available to all US companies and was not willing to even venture int that bee hive.

The final secton of the article is the one I find most off base. it's headline is:

"Oil and Gas Companies Are Not Helping to Reduce Foreign Oil Dependence"
and yet we have added more oil production in the US in the last two years than we have in the previous ten. Bakken crude finds, Eagleford Shale in Texas, and Enhanced recovery projects in West Texas. So that statement on it's face is wrong>
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krzysiek_ck
Champion Author Illinois

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Message Posted: Mar 21, 2013 6:24:16 PM

"Bar large oil and gas companies from using the deduction for domestic manufacturing (often called the Section 199 deduction). Some might wonder why oil and gas companies could use a deduction for “manufacturing” in the first place. A few years ago, Congress actually redefined manufacturing for the purposes of this deduction so that it included oil and gas production, obviously at the behest of the energy industry. The President’s proposal to close this loophole would raise $15.9 billion over ten years."

"Ironically, the stretched American taxpayer subsidizes one of the most profitable industries on Earth. The objective of the subsidy is to decrease dependence on foreign oil. Instead, the industry uses the subsidy to promote higher prices on its company shares and higher values on its executive stock options. Congress should repeal these subsidies."
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brerrabbitTX
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Message Posted: Mar 21, 2013 5:17:25 PM

Once again you post something that agrees with what I have said all along. Want to repeal the depletion allowance? Okay, what effect would it have on the big five oil companies? (I include BP where they don't) The answer 0. Why? Because the big 5 lost the deduction a long time ago. My previous link says that. The article says that would raise $10.8 billion over ten years but what it does not say is that a lot of that money would come out of the pockets of average people and smaller independent oil producers who only do business in the US. I will be honest, I am part of the $10.8 billion and quite frankly I paid 19.1% of my income in federal taxes this year and don't really want to pay more. I am a royalty owner that gets a depletion allowance and there are a lot of us and a large portion of the $10.8 billion would come out of my pocket and others like myself and not big oil.

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krzysiek_ck
Champion Author Illinois

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Message Posted: Mar 21, 2013 2:04:21 PM

"House Speaker John Boehner’s recent comment that Congress should “take a look at” repealing tax subsidies for large oil companies is well-founded. These subsidies are a particularly poor use of taxpayer funds.

The oil and gas industry argues that their tax breaks encourage them to locate and extract more oil and gas, allowing the industry to increase supply and thus keep energy prices down below the level they would otherwise reach. But whatever one thinks of this argument, it totally falls apart when oil is selling at over $100 a barrel. By any relevant measure, oil and gas companies are wildly profitable, and have huge incentives to find and sell more oil. Repealing the tax subsidies that they enjoy will not change this.

While these tax subsidies have increased oil and gas company after-tax profits to some degree, they have not changed the fact that very little of those profits are devoted to exploring for new sources. Their managers direct most of their profits to dividends and stock repurchases. Both of these actions drive up the companies’ share prices, which also benefits managers, whose compensation depends in part on rising stock values."

Congress Should End Oil & Gas Tax Breaks

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.

[Edited by: krzysiek_ck at 3/21/2013 2:05:17 PM EST]
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brerrabbitTX
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Message Posted: Mar 21, 2013 11:44:11 AM

Obviously the thread is not about you. However when you inject "facts" and make claims then it becomes about how you spin your "facts". The thread is not about me either. It's about an ethanol at all cost person (you) who chooses to selectively post links that support only your claims. Additionally the links you post don't even all agree with the point you are trying to make. Therefore at that point the thread becomes about the credibility and honesty of the poster. I present logical information using your links to articles as well as my own links and even your source points out the not all of the tax breaks are exclusive to oil companies which is what I have advocated from the start. The example I use to logically move forward involve individuals tax returns and the tax breaks we all receive to validate the point that all US taxpayers benifit from some form of tax breaks. Rather than acknowledge this simple fact you choose to start classifing tax breaks into seperate categories when logically at the end of the day every tax break granted in the Tax Code results in the same thing. A loss of revenue to the US Government. Want to see some really big numbers? Go find out how much additional tax revenue could be generated if home mortgage interest deductions were eliminated, or personal exemptions or 401(k) deductions, etc. Those numbers dwarf what you say Big Oil gets.

Once again the point of me even posting for so long on this thread is you have to look at the whole picture and not myopically focus on one aspect. Because every solution, or change brings with it a different set of problems. The classic example of an organization trying to do the right thing but causing more harm than good in the end is titled "Why the World Health Organization Was Forced to Parachute Live Cats into Borneo" Google it and read it, there is a lesson to be learned.

I realize you will say I am spinning things again but I am not. You cannot make a claim or an accusation in a vacum. You have to look wholisticly at all situations. Even with ethanol usage you want to see which would be a total E-85 market nationally, the reality is we as a country produce only enough ethanol to cover about 10% of our annual fuel needs. So put all the oil companies out of business tomorrow and I ask where does the other 75% of the E-85 blend you so covet come from? And where does the 15% gas component come from if you have run off the oil companies?

I know spin, spin, spin, but I like to think of it as think, think, think, because when you become so passionatly focused on a singular cause you completely miss reality.
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krzysiek_ck
Champion Author Illinois

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Message Posted: Mar 21, 2013 9:31:29 AM

I asked you a question: "Is this thread about me? Yes or No"

You wrote: "No the thread is about taxes, tax treatment, IRS Tax laws and regulation, and what tax treatments Oil Companies, and all other companies in this country have."

Stick to you word and stay on the subject. Your failure to spin it in a different direction is getting very boring.

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.

[Edited by: krzysiek_ck at 3/21/2013 9:33:12 AM EST]
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brerrabbitTX
Champion Author Houston

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Message Posted: Mar 21, 2013 9:23:29 AM

I think you have represented the fact that you have no real world business experience. You do not work in the industry. You rely solely on other peoples opinions and simply parrot that which others write. You think that posting a link, proves a point regardless of the source of the information. Some of your links that you post ad nauseum actually contridict other posts you have linked to. You feel the need to claim a victory, to be vindicated that above all else you are right. Overall you have demonstrated a unique ability to have any opinion of your own. Without the words of others to fall back on you have none of your own.

So overall before you throw the term "Pathetic" around, you might want to take a long look in the mirror. You might also want to read a little more widely and take a couple of business classes, particularly in the area of tax accounting. It would change your world.

[Edited by: brerrabbitTX at 3/21/2013 9:25:01 AM EST]
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krzysiek_ck
Champion Author Illinois

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Message Posted: Mar 21, 2013 9:11:59 AM

brerrabbitTX wrote: "True because you have neither."

Is this the best you can do? Pathetic.

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.
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brerrabbitTX
Champion Author Houston

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Message Posted: Mar 21, 2013 9:07:51 AM

"All alone I have claimed that oil companies receive federal tax subsidies"

Yes you have done so all alone without support from anyone else. While I have shown repeatly that all US manufacturers get the same tax treatment.
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brerrabbitTX
Champion Author Houston

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Message Posted: Mar 21, 2013 9:05:26 AM

"I'm not the one who put his/hers education and experience on the line"

True because you have neither.
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krzysiek_ck
Champion Author Illinois

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Message Posted: Mar 21, 2013 8:40:00 AM

brerrabbitTX wrote: "I'm done! Your ignorance of simple business priciples, the US Tax Laws, and the fact that you don't even understand or read the links you post have made it clear that you are incapable of understanding of the difference between a tax treatment available to a specific industry and targeted segment of industry."

I'm not the one who put his/hers education and experience on the line only to learn that he/she failed not understand the definition of "tax subsidy". All alone I have claimed that oil companies receive federal tax subsidies while you tried to spin the subject in different directions.

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.
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brerrabbitTX
Champion Author Houston

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Message Posted: Mar 21, 2013 8:29:41 AM

I'm done! Your ignorance of simple business priciples, the US Tax Laws, and the fact that you don't even understand or read the links you post have made it clear that you are incapable of understanding of the difference between a tax treatment available to a specific industry and targeted segment of industry.

And as a final note, a subject I have not even thrown out is state tax subsidies, take a look at the amount of money available to the ethanol industry at the state level and the tax abatements being offered there. We have focused on Federal Taxes but if you investigate a little you will find that the subsidies and grants available to ethanol at the state level are substaintial. I assure you oil companies get none of those. So to say ethanol gets no subsidies is a disingenuos statement when taking a wholistic approach to the subject. Your focus tends fail to see the forest for the trees.

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krzysiek_ck
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Message Posted: Mar 20, 2013 11:04:16 PM

brerrabbitTX wrote: "Thanks once again for making my point."

Spin, spin, and more spin.

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.
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brerrabbitTX
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Message Posted: Mar 20, 2013 9:30:36 PM

So here we go again. This quote is from your link directly:

"Today, here are the current oil specific tax subsidies: Expensing of Intangible Drilling Costs; Percentage Depletion Allowance; Deduction for Tertiary Injectants; Geological and Geophysical Expenditures; Exception for passive loss limitations for oil and gas; Enhanced oil recovery credit; and Marginal oil well credit."

This is from my earlier link which is the same as the tax treatments that have been in your posts saying get rid of tax breaks for oil companies.

"Domestic manufacturing tax deduction -- $1.7 B. This is a tax deduction given to every manufacturer in the US. Per CNN, it was "designed to keep factories in the United States." If that deduction were eliminated for oil companies only, it would mean singling out oil companies from all other manufacturers.Foreign tax credit -- $850 million. Companies get credit for taxes they pay to other countries. All companies get this "subsidy," not just oil companies. Should a company pay tax on tax? Should only oil companies pay tax on tax?"

Did you notice something? The list from your link lists "oil specific tax subsidies". Even that list does not include the Domestic manufacturing tax deduction or the Foreign tax credit. Why? Because as I have said all along those are tax treatments available to all US companies.

The more links you post the more you prove my case that the largest tax treatments available to the oil companies are available to all US companies. Further the Depletion Allowance is not and has not been available to the big five oil companies since the 80's.

So $2.5 billion of the tax treatments oil companies receive are the same that are available to all US companies.

Thanks once again for making my point.
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krzysiek_ck
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Message Posted: Mar 20, 2013 6:34:21 PM

"Did you know that the oldest, continuous tax subsidy for oil companies was enacted by Congress in 1913, making 2013 the 100th year of federal tax subsidies specific to the oil industry? Shouldn’t this event garner a party? The Iowa Renewable Fuels Association (IRFA) and the American Coalition for Ethanol (ACE) thought so and on March 14, 2013 held a “Century of Subsidies” birthday party for big oil in Washington, DC. On hand for the event were Rick Schwarck, president of the IRFA and CEO of Absolute Energy, Monte Shaw, executive director for IRFA and Brian Jennings, executive vice president of ACE."

2013 – 100 Year Anniversary for Oil Tax Subsidies

Looks like there is only one that celebrates 100th anniversary.

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.
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brerrabbitTX
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Message Posted: Mar 20, 2013 4:24:22 PM

Yeah the same welfare that all companies in the US qualify for under the US Tax code including ethanol producers.
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krzysiek_ck
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Message Posted: Mar 20, 2013 4:12:46 PM

Back to the subject:

Happy 100th anniversary to oil tax subsidies, long-lived Big Oil welfare.
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brerrabbitTX
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Message Posted: Mar 20, 2013 3:58:18 PM

By the way there is nothing that is concrete proof, however if you had ever filed a tax return that included income from rental properties as I do every year then you would understand how depreciation works. Any company with real assets uses the method.

An ethnol company builds a plant, installs equipment, starts it's business. The cost of building, land, and equipment is say $25 million. Land cost $5 million. First deduct the land from the cost because land per common use and tax code is a non depreciable asset. Building cost $10 million, equipment $10 million. Life of equipment 7 years, life of building 15 years no salvage value. Straight line depreciation would be $1.428 million a year for equioment and $.666 million a year for the building. Add them together and you get a deduction of $2.094 million a year that reduces your tax liability. This is not rocket science! This is common knowledge to anyone who understands business and finacial statement which I do.

This is not opinion, this is fact, it is the law in the US, it is the accounting system used by virtually every business that operates in the US. Your level of understanding of basic accounting and definitions would get you kicked out of a freshman accounting course.

[Edited by: brerrabbitTX at 3/20/2013 3:59:50 PM EST]
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brerrabbitTX
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Message Posted: Mar 20, 2013 3:47:40 PM

IRS description of depreciation

"Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property.

Most types of tangible property (except, land), such as buildings, machinery, vehicles, furniture, and equipment are depreciable. Likewise, certain intangible property, such as patents, copyrights, and computer software is depreciable."

My statement about depreciation is not an opinion. It's in the tax code. Every industrial cocern or company in the country is allowed to depreciate it's assets and deduct that depreciation as an expense. This lowers their tax obligation. As a tax person about it. Ethanol manufacturers spend lots of money on capitalized assets and they depreciate them in order to lower their tax payments. They are not the only ones, oil companies do it and so does every other business in this country that has capitilized assets. If they don't they are foolish and paying money that should not be paid and doing a dis service to their shareholders. Since many of the ethanol producers in this country are publicly owed companies I am sure the shareholders would be a little upset if they were over paying thier taxes.

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krzysiek_ck
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Message Posted: Mar 20, 2013 3:34:19 PM

wrote: "1. According to your definition of a subsidy yes. According to my definition no."

Except your definition is not even on the subject. I guess the answer is Yes.

Also not we know exactly who is "really are trying to confuse the issue".

[Edited by: krzysiek_ck at 3/20/2013 3:40:10 PM EST]
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krzysiek_ck
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Message Posted: Mar 20, 2013 3:26:32 PM

First definition I have provided:

"tax subsidy
a reduction in tax in order to reduce the cost of producing food, a product, etc. and to help to keep its price low"

brerrabbitTX wrote: "And on question 3 you say no but it fits the definition of a tax subsidy you provided so again you contridict yourself."

How exactly have I contradicted myself? Do you care to try to spin it a different way?
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krzysiek_ck
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Message Posted: Mar 20, 2013 3:20:51 PM

brerrabbitTX wrote: "And by the way your answer to number 1 is wrong as well."

Wrong. Since you reply to my personal with the personal opinion on your own what would make your opinion right and mine wrong? Also it would indicate that I was wrong on the others. Wrong again.

"1. Yes, they don't need it."

Unless you have concrete proof that my answer is wrong, by default you are the one in the wrong.

[Edited by: krzysiek_ck at 3/20/2013 3:24:00 PM EST]
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brerrabbitTX
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Message Posted: Mar 20, 2013 3:04:09 PM

And by the way your answer to number 1 is wrong as well. The ethanol industry build plants and capitilizes the machinery and assets of the plant. When they capitize those assets they then take a depretion allowance each year as an offset to earnings therefore reducing their profit on paper and resulting in lower tax costs.

Don't believe me go look at some annual statements from ethanol plants and you will see where the depreciate their equipment.

If the ethanol plant pays foriegn taxes which is the example I gave in the question I asked you then they get to deduct those from earnings as well.

So your statement the ethanol industry does not have them and the oil industry does is flat out wrong. Every manufacturing concern in the country gets them including ethanol plants.

[Edited by: brerrabbitTX at 3/20/2013 3:06:51 PM EST]
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brerrabbitTX
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Message Posted: Mar 20, 2013 2:55:00 PM

This is from the last link you provided on the definition of tax subsidies:

tax subsidies
subsidies provided through the tax system to particular industries or to particular expenditures, in the form of favorable tax treatment

So you answer no to my questions 2 and 3. How is a mortgage interst deduction taken on a tax return not a subsidy to a particular expenditure?

If you buy a house part of the expenditure if you finance that house is interest expense that you can deduct from you income in order to lower the taxes you owe. Therefore if fits exactly into your definition of a tax subsidy so your answer to 2 contridicts the definition you provided, so which do you believe? And answering both is not an option.

And on question 3 you say no but it fits the definition of a tax subsidy you provided so again you contridict yourself.

You can't have it both ways.
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brerrabbitTX
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Message Posted: Mar 20, 2013 2:47:11 PM

I am not going to dispute what the oil industry does or does not do when it comes to it's feelings about ethanol. That's not what I have been discussing here.

The point is that to the extent oil disiminates false information the same can be said about many oil detractors. The tax treatments I have spoke of are not unique to the oil industry. Depretiation of asset, foriegn tax credits and certain others are available to all industries. Even ethanol companies will use the depreciation allowance for capital assets. So to muddy the water by saying that these are subsidies to big oil makes it sound like it is something they get and no one else does. That is not an accurate statement.

And while they get the same tax treatments that other companies do the Oil companies still pay more in taxes than any other industy segment. In 2012 Exxon will pay $31 billion in income taxes making them the number 1 largest taxpayer in the US. Chevron is number 2 and Conoco in number 5. Say what you will they pay a lot in taxes.

The last point I will make is this. For all the lies, and misinformation that oil companies may spread concerning ethanol in the current environment they are the largest purchasers of ethanol in the US and for what it's worth probably the largest buyers in the world. Sort of ironic isn't it?
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krzysiek_ck
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Message Posted: Mar 20, 2013 2:03:54 PM

brerrabbitTX wrote: "Now for my questions to you,

1. Do you think it is fair for oil companies to lose a tax deduction that every other business concern in the country is entitled to such as the Foriegn Tax Credit? Yes/No

2. Do you consider the deductions that every American is entitled to per tax law subsidies? Yes/No

3. Do you consider any personal tax deductions you enjoy as an American Taxpayer a subsidy? Yes/No."

1. Yes, they don't need it. Grain ethanol industry does not have them and oil should not as well.
2. No, see the definition of "tax subsidy"
3. No, see the definition of "tax subsidy"
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Hannie59
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Message Posted: Mar 20, 2013 1:44:12 PM

brerrabbitTX your posts are not the ones that are the problem by any means. And I, by all means am a capatilist. I have no problem with profitibility, nor corporate profitibility. It's all necessary.

In fact, I like all energy and a level playing field. And facts. Which in this debate, facts are most difficult to see. There's just too much smoke in the way. And yep, I do see the petroleum industry as the primary source of this figurative smoke that is in the way of the facts people need to know.

So we keep on lol....

[Edited by: Hannie59 at 3/20/2013 1:45:35 PM EST]
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brerrabbitTX
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Message Posted: Mar 20, 2013 12:47:05 PM

Hannie,
I have no issue's what so ever with your views of oil comapnies. I work for one, I can tell you they are not always what they seem, but then again they are rarely as evil as they are accused of being either.

I like to look at things fairly and the essence of this discussion has devoleved into eliminating tax breaks (or whatever you as an individual is comfortable calling them) for a selective group of companies because the are evil, make to much money, or are block something you support from happening.

That said lets be intellectually honest and understand that many of the tax treatments oil companies use are widely available to all companies in the US. In the spirit of honesty I will say that there are a few (with relatively small value) that are unique to oil companies and I have no proble with their elimination.

All I have asked for at this point is does anyone think we should eliminate the widely available tax treatments for everyone, or just the oil companies, and if just the oil companies is that a fair and attainable position to reach.

I tried to draw analogies to other tax treatments ranging from an indivduals tax deductions to Foriegn Tax credits treatment and been told that it has nothing to do with the topic. Okay you don't want to talk personal taxes but the Foriegn Tax Credit is one that is actually targeted as an oil subsidy.

If we devolve to a point where one group does not care for a class of businesses or even a specific company does that mean we should start campaigns to cut all tax treatments they receive in order to punish them?

I appreciate your response, I respect your view, and I would hope you do the same. The discussion here really comes down to a fairness issue when it comes to tax treatment by the Federal Government. I mean when the government raised the taxes on those making above a certain amount I am sure that those making less said it was fair while those making above the number were not so happy.
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Hannie59
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Message Posted: Mar 20, 2013 12:11:21 PM

brerrabbit TX, let me explain why I posted this. This forum is full of posters who either

A) Do nothing but post one line rhetoric, such as "Mandate" and "subsidy" and "eats through lines" ad nauseum.

or

B) post the above for the purpose of points.

Oil is making a huge, coordinated effort to slander biofuels, the best at this time of which happens to be ethanol. They need money to continue to "develop" the tar sands, ad nauseum. They run full speed to the mainsteam media with deliberately falsified information and dollars in hand so it will be published.

My post appears to attack oil, but I do so only because they have engaged in a campaign of gross misinformation to protect their interests. They OWN the economy of this country. The development of renewables is vital to our country, security, and most of all our economy. A one fuel, corrupt monopoly is just wrong. And they will stop at nothing. Gross misinformation and flat out lying and deception, sadly, is just the beginning. They don't want competion and right and wrong just doensn't matter.


[Edited by: Hannie59 at 3/20/2013 12:19:21 PM EST]
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