The future of the coal industry

[Hawker]

I'm not into the demonization of just the oil/gas companies because they are not the only industry that loves corporate welfare but you can't deny that oil/gas companies heavily lobby politicians to keep these subsidies for their own self interest.

Oil and gas companies are just like any other corporation and they must maximize profits, and if they can maximize profits by lobbying for tax breaks and lobbying for tax loopholes then one can argue their executives owe a fiduciary duty to do so to maximize profits for their shareholders.

Finally all businesses incur expenses and individuals do as well. But not all businesses and individuals are given preferential tax breaks to "recover" their expenses like you stated.

I won't deny the lobbyists/PACs. I used to get emails in the US from my company about which politicians to support and it really pissed me off. Blame the SCOTUS as they deemed it legal.

Those tax breaks have been around for at least a century dude and they could've been eliminated when the democrats controlled the senate. And the tax breaks are legit and preferential is really an incorrect name for them. They are unique to the industry but still accomplish the primary goal of recovering expenses like all businesses.

[Hawker]

What does that even mean?

Don't understand how you can call it a shortfall when the actual tax they should've owed after writing off expenses is less than what they paid. The "shortfall" doesn't exist.

[ALBballer]

I won't deny the lobbyists/PACs. I used to get emails in the US from my company about which politicians to support and it really pissed me off. Blame the SCOTUS as they deemed it legal.

Those tax breaks have been around for at least a century dude and they could've been eliminated when the democrats controlled the senate. And the tax breaks are legit and preferential is really an incorrect name for them. They are unique to the industry but still accomplish the primary goal of recovering expenses like all businesses.

I have always said that both parties are for giving shit away for free because giving away shit is what gets you elected. What I would propose is to lower income tax rates for all (corporations included) and simplify the tax codes and get rid of most tax loopholes and tax deductions but that wouldn't get me elected because everyone has their favorite tax deduction and I would lose against a politician that is offering you things.

There was a time when Corporations paid a larger share of revenues to the federal government but over time due to lobbying, the tax code unableto keep with the modern shift our economy has gone from goods to services and amongst other things have allowed corporations to lower their share to federal revenues and politicians found other sources to raise revenue.

Also why should oil/gas companies be allowed to "recover" all deductions like you stated? In the past 5 years they have made record profits and have more then recovered their costs. Imagine a system where we all areallowed to "recover" all deductions.

Don't understand how you can call it a shortfall when the actual tax they should've owed after writing off expenses is less than what they paid. The "shortfall" doesn't exist.

Have you taken an accounting course? Here I'll give you a basic rundown of corporate income taxes.

Revenues - Expenses= Profit/Loss x Tax Rate = Taxes Due

Companies are afforded expenses, in fact for tax purposes, the tax code provides certain favorable tax deductions and the ability to defer taxes allowing companies to decrease their Profit.

The shortfall exists by allowing corporations to lower taxable income due to favorable tax laws and thus the government has to find other ways to pick up income.

[Hawker]

I have always said that both parties are for giving shit away for free because giving away shit is what gets you elected. What I would propose is to lower income tax rates for all (corporations included) and simplify the tax codes and get rid of most tax loopholes and tax deductions but that wouldn't get me elected because everyone has their favorite tax deduction and I would lose against a politician that is offering you things.

There was a time when Corporations paid a larger share of revenues to the federal government but over time due to lobbying, the tax code unableto keep with the modern shift our economy has gone from goods to services and amongst other things have allowed corporations to lower their share to federal revenues and politicians found other sources to raise revenue.

Also why should oil/gas companies be allowed to "recover" all deductions like you stated? In the past 5 years they have made record profits and have more then recovered their costs. Imagine a system where we all areallowed to "recover" all deductions.



Have you taken an accounting course? Here I'll give you a basic rundown of corporate income taxes.

Revenues - Expenses= Profit/Loss x Tax Rate = Taxes Due

Companies are afforded expenses, in fact for tax purposes, the tax code provides certain favorable tax deductions and the ability to defer taxes allowing companies to decrease their Profit.

The shortfall exists by allowing corporations to lower taxable income due to favorable tax laws and thus the government has to find other ways to pick up income.

I agree with a flat tax like you said.

And why shouldn't oil/gas companies be allowed to recover their expenses? Are you unaware of the industry at the moment? What does record profits have to do with anything? And these are probably just the big oil companies who aren't really eligible for these deductions. Who/what/how defines how much profit is too much profit? Multiple oil and gas companies have declared bankruptcy this year in the US due to the low oil price. Talk to me in a year and we'll see a record low in profits for O&G companies. It balances out as the industry is cyclical. I'm sure there will be an outrage as well as lobbying for these companies to get government bailouts to maintain jobs in the industry (jokes).

There's a record low in drilling rigs and tons of lost jobs. I've even been laid off (not asking for sympathy btw since I'm aware I'm in a cyclical industry and can sit on my ass for 1.5-2 years with my current savings and be ok).

Thanks for the accounting lesson. Never taken an accountant course since I figured it's all just basic math anyway.

My argument is the lowered taxable income is the corrected taxable income so no shortfall really exists and that government income never existed or should have existed. Even if you want to argue there is a shortfall, that's not the corporation's problem.

[ALBballer]

I agree with a flat tax like you said.

And why shouldn't oil/gas companies be allowed to recover their expenses? Are you unaware of the industry at the moment? What does record profits have to do with anything? And these are probably just the big oil companies who aren't really eligible for these deductions. Who/what/how defines how much profit is too much profit? Multiple oil and gas companies have declared bankruptcy this year in the US due to the low oil price. Talk to me in a year and we'll see a record low in profits for O&G companies. It balances out as the industry is cyclical. I'm sure there will be an outrage as well as lobbying for these companies to get government bailouts to maintain jobs in the industry (jokes).

There's a record low in drilling rigs and tons of lost jobs. I've even been laid off (not asking for sympathy btw since I'm aware I'm in a cyclical industry and can sit on my ass for 1.5-2 years with my current savings and be ok).

Thanks for the accounting lesson. Never taken an accountant course since I figured it's all just basic math anyway.

My argument is the lowered taxable income is the corrected taxable income so no shortfall really exists and that government income never existed or should have existed. Even if you want to argue there is a shortfall, that's not the corporation's problem.

Not exactly flat tax but lowered income tax rates without all the BS loopholes meaning effective tax rates won't change that much.

Also I don't understand what you are not getting about the "recovering" of expenses. The corporation takes a deduction for the expenses on their tax return and gets to reduce their income. Your idea of reduction is someone taking a deduction on their tax return and getting an additional subsidy in form of tax deductions/credits to reduce their expenses. That's a subsidy and basically corporate welfare.

BTW i'm not here to debate what is "too much profit" but I don't think massively profitable companies should be receiving government handouts. I'm in favor of reducing handouts for all not just oil/gas companies but I will admit my hypocrisy because I do have a soft spot for companies going "green."

PS:

Hang in there, oil will eventually go up? In the meantime I bet you will take advantage of the socialist-like programs like unemployment, you capitalist you.

[Hawker]

Not exactly flat tax but lowered income tax rates without all the BS loopholes meaning effective tax rates won't change that much.

Also I don't understand what you are not getting about the "recovering" of expenses. The corporation takes a deduction for the expenses on their tax return and gets to reduce their income. Your idea of reduction is someone taking a deduction on their tax return and getting an additional subsidy in form of tax deductions/credits to reduce their expenses. That's a subsidy and basically corporate welfare.

BTW i'm not here to debate what is "too much profit" but I don't think massively profitable companies should be receiving government handouts. I'm in favor of reducing handouts for all not just oil/gas companies but I will admit my hypocrisy because I do have a soft spot for companies going "green."

PS:

Hang in there, oil will eventually go up? In the meantime I bet you will take advantage of the socialist-like programs like unemployment, you capitalist you.

I understand that it is tax deduction on total income but it's still not a subsidy in terms of a grant or direct government payment for doing something.

We will just have to agree to disagree.

Oil will eventually go "up" but I don't think it will ever be like it was. Once again, the US fugged up and produced a shit ton of oil and flooded the market. They created a bubble and it burst. I'm in Australia at the moment and getting a nice 3 month tax free package (socialism baby!). I don't think I'd be eligible for unemployment if I go back in the US although I could argue that even though I'm being taxed on worldwide income and did work in the US prior to Australia I deserve it.

I actually want to get out of O&G as I lost a bit of interest in it over the year and I can't be going through this kind of stress every 5-7 years. I'm good now since I'm single with no debt but can't imagine going through this with wife, kids, house etc. I was only ever in it for the money and the travel. I actually found being an environmental engineer more interesting.

[Jasper]

We just decommissioned one of the largest coal plants in the world near me. It's being replaced with the largest solar farm in the world. Generating electricity at an average of 19.5 cents/kwh, meaning our hydro rates will need to go up even more to compensate.

Awesome idea, replacing 6 cent/kwh energy with 19.5 cent/kwh energy. All the liberal hippies think it's great, but their parents paying the bills disagree. Rant over.

where is that farm ??