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Depletion allowance doesn't make an unprofitable well profitable.My example only had 20 million in production. Sorry if that was too complex for you.The gross income was 20 million. That doesn't allow 3 million a year, forever. That allows a total of 3 million.Come on, use your head. I already told you how it was different. The depletion allowance can exceed the value of the original investment, which is total bullshit and makes no sense whatsoever. How can you justify that? In your example the depletion allowance would have been three million dollars. And it could be three million dollars in perpetuity. I mean why don't I get a depletion allowance for the gasoline I buy for my business. I fill up, it costs forty bucks. I write off the forty bucks and then, well hell, I guess I should get a depletion allowance because that gas gets depleted.
For that one year. The next year, say the oil wheel explodes and results in 100 million dollars in income. The depletion allowance is 15 million. Or let's just say the oil produces 20 million a year for twenty years. Well, that is a three million dollar depletion allowance each and every year. Now, I have stated that the difference between a depletion allowance and depreciation is that the depletion allowance can exceed the value of the original investment. Unlike depreciation, or even normal expenses, the depletion allowance is not limited to the cost of the property.
And if you want to support the depletion allowance then you better not ever, EVER, call yourself a supporter of "free markets". The depletion allowance results in ineffective allocation of resources, it distorts markets, Today, this very day, there are hundreds of wells operating at what would be a loss, or at production levels so low they do not justify continued extraction BUT FOR the depletion allowance. Hell, sometimes they are sold as "investments", not for the value of the oil extracted, BUT FOR the damn depletion allowance. Since the depletion allowance is calculated on gross revenue it both subsidizes, and encourages, all the cost associated with oil production. From the foreman's salary to the equipment. And you guys bitch about clean energy subsidies. Talk about cognitive dissonance.
Now, when you get a chance, explain how the allowance, which is capped at the net income of a well, results in misallocation of resources?
If you want to push for not taxing "green energy" profits, go for it. The taxpayer would save billions in actual handouts that do distort markets.
Your example is not complicated and I understood it perfectly. The allowance is not capped at the net income of the well. It is capped at 65% of the net income of the well, FOR THAT DAMN YEAR: So yes, the depletion allowance, over the life of the well, can easily exceed the total initial capital investment in the well.
Now, if a company, or even an individual, has two competing investment opportunities, one that includes a depletion allowance and one that does not, and that company or individual picks the one with the depletion allowance, even though the other investment would provide a better return BUT FOR the depletion allowance, the result is, wait for, a misallocation of resources.
The ideal corporate tax rate is zero. We should kill ethanol mandates and all the green energy boondogles.Depletion allowance doesn't make an unprofitable well profitable.My example only had 20 million in production. Sorry if that was too complex for you.The gross income was 20 million. That doesn't allow 3 million a year, forever. That allows a total of 3 million.
For that one year. The next year, say the oil wheel explodes and results in 100 million dollars in income. The depletion allowance is 15 million. Or let's just say the oil produces 20 million a year for twenty years. Well, that is a three million dollar depletion allowance each and every year. Now, I have stated that the difference between a depletion allowance and depreciation is that the depletion allowance can exceed the value of the original investment. Unlike depreciation, or even normal expenses, the depletion allowance is not limited to the cost of the property.
And if you want to support the depletion allowance then you better not ever, EVER, call yourself a supporter of "free markets". The depletion allowance results in ineffective allocation of resources, it distorts markets, Today, this very day, there are hundreds of wells operating at what would be a loss, or at production levels so low they do not justify continued extraction BUT FOR the depletion allowance. Hell, sometimes they are sold as "investments", not for the value of the oil extracted, BUT FOR the damn depletion allowance. Since the depletion allowance is calculated on gross revenue it both subsidizes, and encourages, all the cost associated with oil production. From the foreman's salary to the equipment. And you guys bitch about clean energy subsidies. Talk about cognitive dissonance.
Now, when you get a chance, explain how the allowance, which is capped at the net income of a well, results in misallocation of resources?
If you want to push for not taxing "green energy" profits, go for it. The taxpayer would save billions in actual handouts that do distort markets.
Your example is not complicated and I understood it perfectly. The allowance is not capped at the net income of the well. It is capped at 65% of the net income of the well, FOR THAT DAMN YEAR: So yes, the depletion allowance, over the life of the well, can easily exceed the total initial capital investment in the well.
Now, if a company, or even an individual, has two competing investment opportunities, one that includes a depletion allowance and one that does not, and that company or individual picks the one with the depletion allowance, even though the other investment would provide a better return BUT FOR the depletion allowance, the result is, wait for, a misallocation of resources.
What the hell does that have to do with anything? It still results in ineffective allocation of resources. It still can exceed the value of the initial capital investment over time. Which you have yet to justify. Honestly, it is no damn different than ethanol subsidies. Do you support those?
Sounds like you should love it as well. Liberals love tax hikes and hate it when people can keep more of their own money.The middle working class is getting hit with the inflation tax very gradually as a consequence of the GOP adopting chained cpi into their bill. The full effect won't be realized for another 6 1/2 - 7 years when it maxes out. Many will end up in a higher tax bracket while the dollar dwindles farther down from its current 4 cent value.
Politicians love the inflation tax because they don't have to vote on it.
How many people do you employ? How much did you give back to employees and how much to the people that invested in your company?Only 13% of business' tax cuts are going to workers, survey says
Tax cut scoreboard: Workers $6 billion; Shareholders $171 billion
Wow, this is one of the most expensive tax cuts in history. And at a time when corporations are doing really, really well. Why not share with the workers?
ARC: Athens County back to 'distressed' status
This is Appalachia, the center of the Republican Party. The area that has the 10 poorest counties in the United States. Those counties being more than 98% white.
Why not pass some of those tax cuts along as wage increases for whites living in the Appalachia area?
There is an adjustment coming. Don't believe it will be a crash in the traditional sense. More of a correction.Be ready for the crash, it's coming. Soon.My 401k is doing great. Pretty happy.
The ideal corporate tax rate is zero. We should kill ethanol mandates and all the green energy boondogles.
Why stop at zero? Why not barrow to pay companies to make money?We already do that. Check out the list of companies the CIA is invested in. How about Amazon?The ideal corporate tax rate is zero. We should kill ethanol mandates and all the green energy boondogles.
How many people do you employ? How long have you been a business owner?The tax evading wealthy & businesses who whine about everything call the police 5+ times a day on working class tax paying Americans.
The average local Walmart store or McDonald's restaurant location doesn't pay property taxes that fund police, but they call the police 5+ times a day, while the average citizen pays property taxes & calls the police once every 5 years!!!
Trump & his minions have round the clock tax payer funded police protection! The private security protecting the top .1%, all their assets, properties & their $20 million mansions you are not allowed to see, were all trained by the tax payers.
Only 13% of business' tax cuts are going to workers, survey says
Be ready for the crash, it's coming. Soon.My 401k is doing great. Pretty happy.
Liberal....Moron.....either......both.Sounds like you should love it as well. Liberals love tax hikes and hate it when people can keep more of their own money.The middle working class is getting hit with the inflation tax very gradually as a consequence of the GOP adopting chained cpi into their bill. The full effect won't be realized for another 6 1/2 - 7 years when it maxes out. Many will end up in a higher tax bracket while the dollar dwindles farther down from its current 4 cent value.
Politicians love the inflation tax because they don't have to vote on it.
Heh. Liberal, huh. That word probably doesn't mean what you think it does, Toddster. Go color. You're out of your league.
Wrong on everything. So dumb. Child like.Only 13% of business' tax cuts are going to workers, survey says
That is apparently why NaziCons are not going to campaign on this issue for the midterms. It's a dud.
Real incomes are rising, idjit.Any theoretical gains in income are illusionary gains because they are gains which are caused by inflation.
Study economic theory and monetary policy, people.
And don't waste your time tinkering with statist hacks like Toddster.
How'd he do that? Be specific.The ideal corporate tax rate is zero. We should kill ethanol mandates and all the green energy boondogles.
Trump has caused Medicare trust to empty out 3 years earlier than last years estimate.
My 401k is doing great. Pretty happy.
Only 13% of business' tax cuts are going to workers, survey says
Tax cut scoreboard: Workers $6 billion; Shareholders $171 billion
Wow, this is one of the most expensive tax cuts in history. And at a time when corporations are doing really, really well. Why not share with the workers?
ARC: Athens County back to 'distressed' status
This is Appalachia, the center of the Republican Party. The area that has the 10 poorest counties in the United States. Those counties being more than 98% white.
Why not pass some of those tax cuts along as wage increases for whites living in the Appalachia area?
They aren't interested in DOING anything for these people because they know these people are in perpetual ignorance and will vote against their own best interests without question.
And a recent poll finds only 19% say the tax cuts benefited them. People do know by now that it was a scam and that awareness will only grow as time goes on.
Again I will ask. How many people do you employ? How much did you give back?"The financial outlook for Medicare’s Hospital Insurance Trust Fund deteriorated in the last year, and Social Security still faces serious long-term financial problems, the Trump administration said on Tuesday.
The projections are the first from the administration since President Trump signed a $1.5 trillion tax cut into law in December. They show no sign that a burst of economic growth will significantly improve the finances of the government’s largest entitlement programs.
The Medicare trust fund will be depleted in 2026, the administration said. By contrast, the government said last year that the trust fund would be exhausted in 2029."
This is driving up the 10 year bond prices.
