Obama wants to end $4B oil industry tax breaks.

[EpyonXero]

http://money.cnn.com/2011/04/26/news/economy/oil_tax_breaks_obama/?section=money_latest

NEW YORK (CNNMoney) -- President Obama repeated his call Tuesday for an end to $4 billion in oil industry tax breaks as gas prices approach $4 a gallon and after a top lawmaker indicated a possible shift in Republican policy.

In a letter to congressional leaders, the president said the oil industry is profitable enough without the tax incentives and that the money should be spent on alternative energy sources and conservation.

0Email Print "CEOs of the major oil companies have made it clear that high oil prices provide more than enough profit motive to invest in domestic production without special tax breaks," said Obama. "As we work together to reduce our deficits, we simply can't afford these wasteful subsidies."

This week those profits are going to be front and center. BP (BP) is expected to report earnings on Wednesday. Exxon (XOM, Fortune 500) is slated to announce its results on Thursday. Some analysts expect the company's profits to jump 50% from last year. Chevron (CVX, Fortune 500) is scheduled to make its earnings announcement on Friday.

The oil industry and many of its supporters in Congress have long argued that the tax breaks encourage domestic oil production and provide jobs for millions of Americans. Republicans in particular have resisted efforts to eliminate these tax breaks, something many Democrats have been trying to do since at least 2008.

But on Monday night, Speaker of the House John Boehner indicated he might be open to taking some of those breaks off the table.

Drill baby drill won't lower gas prices
"I don't think the big oil companies need to have the oil depletion allowances, but for small, independent oil and gas producers, if they didn't have this, there'd be even less exploration in America than there is today," Boehner said on ABC's World News Tonight. "It's certainly something we need to be looking at."

Depletion allowances let oil companies treat the oil in the ground as capital equipment, and they can write off a certain percentage for each barrel that comes out.

On Tuesday the speaker appeared to backtrack from those comments, with an aid telling CNN that "what the President has suggested so far would simply raise taxes and increase the price at the pump."

Nonetheless, Obama took the chance to pounce, saying in his letter that he was "heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies."

This all comes as the price of gasoline surges above $4 a gallon in many states, making it increasingly difficult politically to defend Big Oil.

As gas prices approach their record highs set in 2008 they are threatening to derail the nation's nascent economic recovery.

The tax breaks in question
The Obama administration is targeting nine tax breaks, according to a paper from the left-leaning Center for American Progress. Four account for the lion's share of the money:

Domestic manufacturing tax deduction: This is the largest single tax break, and would save over $1.7 billion a year if eliminated.

The tax deduction, passed in 2004, is designed to keep factories in the United States. Companies that manufacture here can deduct 9% of their income from operations that are attributed to domestic production.

But some question if that incentive is really appropriate for oil companies. "What are they going to do, move the oil field to the North Sea," said one staffer at the Center for American Progress said in an interview earlier this year.

No, but higher costs in the United States may make them move the drill rigs to the North Sea or some other place.

Eliminating the tax breaks "would actually discourage new energy projects and new hiring in one of the nation's most dependable job-creating industries," the American Petroleum Institute said in a statement at the time, noting the industry currently supports over 9 million jobs.

The percentage depletion allowance: This lets oil companies deduct about 15% of the money generated from a well from its taxes. Eliminating it would save about $1 billion a year.

The deduction essentially lets oil companies treat oil in the ground as capital equipment. For any industry, the value of that equipment can be written down each year.

But critics say oil in the ground is not capital equipment, but a national resource that the oil companies are simply using for their own profit.

The foreign tax credit: This provision gives companies a credit for any taxes they pay to other countries. Altering this tax credit would save about $850 million a year.

Foreign governments can collect money from oil companies through royalties -- fees for depleting their national resources -- and income taxes.

A royalty would be deducted as a cost of doing business, and would likely shave about 30% off a company's tax bill. Categorized as income tax, it is 100% deductible.

Foreign governments long ago grew wise to the U.S. tax code. To reduce costs for everyone involved and attract business, they agreed to call some royalties income taxes, allowing oil companies to take the 100% deduction on a bigger slice of their bill.

Intangible drilling costs: This lets the industry write off about $780 million a year for things like wages, fuel, repairs and hauling costs.

All industries get to write off the costs of doing business, but they must take it over the life of an investment. The oil industry gets to take the drilling credit in the first year.

[zerioustt]

oh yeah...higher gas prices and an even higher unemployment rate, go obama.


is it that hard to understand if you tax the shit out of rich people it screws the economy? wealthy people are the one who make jobs, higher the small business man, and keep the economy running.

[Homeslice]

oh yeah...higher gas prices and an even higher unemployment rate, go obama.


is it that hard to understand if you tax the shit out of rich people it screws the economy? wealthy people are the one who make jobs, higher the small business man, and keep the economy running.

Who is talking about new taxes? He's talking about taking a tax BREAK away from an industry that arguably doesn't need it.

I mean get real.........Giving a tax break intended for manufacturers to the oil industry? A dumb idea from the beginning. Oh, and such a coincidence that it happened in 2004 when Texan Bush was in charge.

[Switch]

Yeah, giving tax breaks to the rich has really helped our economy...

Oh wait...

Dumbass.

[OneSickPsycho]

And how are the oil companies going to make up the profit??? Stupid idea to begin with, yes... Even dumber to consider killing it at this point in time.

[dReWpY]

And how are the oil companies going to make up the profit??? Stupid idea to begin with, yes... Even dumber to consider killing it at this point in time.

put it this way, between the oil fires and this, i filled up today, i didnt do it because i thought teh world would end, but because i was low on gas, thats the bitch about all of this is they know we need gas, they will fuck us over... period

[zerioustt]

Yeah, giving tax breaks to the rich has really helped our economy...

Oh wait...

Dumbass.

I would try to explain but you calling a dumbass shows me you dont have the intellect to comprehend.

[zerioustt]

And how are the oil companies going to make up the profit??? Stupid idea to begin with, yes... Even dumber to consider killing it at this point in time.


exactly, only thing youre going to do is piss them off, and you know who suffers? thats right the working man.

[Switch]

I would try to explain but you calling a dumbass shows me you dont have the intellect to comprehend.

Enlighten me.

[goof2]

I don't really care if the tax breaks are kept or removed. I do realize though that the impetus of "screwing those dastardly oil companies" or "getting money from the rich company instead of the working man" are completely removed from reality. The money to pay for it will have to come from somewhere and it is a safe bet it won't come out of their profits. Any increase in tax liability will be passed directly on to consumers at the pump.

[Dave]

Yeah, giving tax breaks to the rich has really helped our economy...

Oh wait...

Dumbass.

Where were you thirty something years ago?

[zerioustt]

Where were you thirty something years ago?

he doesnt know what you are talking about. haha

[Avatard]

This just in: We're fucked regardless. The rich oil companies (reporting record profits again) will continue to get richer, and they'll do it by taking your money, either as tax breaks or at the pump.

How exactly would you like your fucking, sir?

[anthonyk]

Give it to me at the pump, please. At least it's a more honest-feeling screwing.

[Switch]

Where were you thirty something years ago?

Reaganomics is bullshit. That POS was the one who introduced corporations into government.

[Captain Morgan]

put it this way, between the oil fires and this, i filled up today, i didnt do it because i thought teh world would end, but because i was low on gas, thats the bitch about all of this is they know we need gas, they will fuck us over... period

This is the biggest problem. No really viable options. Oh, I know, get a job closer to work so you can walk or ride a bicycle. Great, except for the fact I still have to buy groceries, pick up and take my daughter to school, haul stuff places, etc. I can't move my job closer to my daugher's school and can't move her school closer to my job. Once my daughter is no longer on training wheels, I will likely ride a bike, and just have her ride to school as well. Sorry, she can't ride the bus from my house, her mom lives in a different school district than I do.

Buy a more fuel-efficient car. Great, so now I have to spend several thousand dollars so that I can get 40 mpg instead of 33 mpg. No thanks. Motorcycle has the same limitations as walking or riding a bicycle, so that doesn't help (although I ride it when possible). There are no real alternative sources of energy and frankly, there is no REAL reason for gas to be $4 a gallon. But the oil companies have finally figured out there isn't shit we can do about it, so they keep finding ways to cause a "shortage." Fuckers.

[zerioustt]

This is the biggest problem. No really viable options. Oh, I know, get a job closer to work so you can walk or ride a bicycle. Great, except for the fact I still have to buy groceries, pick up and take my daughter to school, haul stuff places, etc. I can't move my job closer to my daugher's school and can't move her school closer to my job. Once my daughter is no longer on training wheels, I will likely ride a bike, and just have her ride to school as well. Sorry, she can't ride the bus from my house, her mom lives in a different school district than I do.

Buy a more fuel-efficient car. Great, so now I have to spend several thousand dollars so that I can get 40 mpg instead of 33 mpg. No thanks. Motorcycle has the same limitations as walking or riding a bicycle, so that doesn't help (although I ride it when possible). There are no real alternative sources of energy and frankly, there is no REAL reason for gas to be $4 a gallon. But the oil companies have finally figured out there isn't shit we can do about it, so they keep finding ways to cause a "shortage." Fuckers.

i have a honda FIT(fag in transit)and i get 38+ miles to the gallon, car cost 17k. i could probably pick up a few more mpg's if i would make a short ram intake for the car.

[Dave]

Reaganomics is bullshit. That POS was the one who introduced corporations into government.

Mmm yes and stealing everyones hard earned money through the irs and then awarding it to baby factories and illegals works sooo much better. You're blind faith in that rolling whore we call government makes a fantastic argument towards manditory conscription in this country. Alas you won't even be able to connect those dots :rolleyes:

[Dave]

This is the biggest problem. No really viable options. Oh, I know, get a job closer to work so you can walk or ride a bicycle. Great, except for the fact I still have to buy groceries, pick up and take my daughter to school, haul stuff places, etc. I can't move my job closer to my daugher's school and can't move her school closer to my job. Once my daughter is no longer on training wheels, I will likely ride a bike, and just have her ride to school as well. Sorry, she can't ride the bus from my house, her mom lives in a different school district than I do.

Buy a more fuel-efficient car. Great, so now I have to spend several thousand dollars so that I can get 40 mpg instead of 33 mpg. No thanks. Motorcycle has the same limitations as walking or riding a bicycle, so that doesn't help (although I ride it when possible). There are no real alternative sources of energy and frankly, there is no REAL reason for gas to be $4 a gallon. But the oil companies have finally figured out there isn't shit we can do about it, so they keep finding ways to cause a "shortage." Fuckers.

Newsflash: it ain't just big oil who want expensive gas

[Homeslice]

i have a honda FIT(fag in transit)and i get 38+ miles to the gallon, car cost 17k. i could probably pick up a few more mpg's if i would make a short ram intake for the car.

LMAO..... no.

First, "short ram" is a dumb riceboy term. While the word "short" is indeed correct, there is absolutely no "ramming" going on with those things.

Just call it a cone filter on a pipe and be done with it.

Second, I've never gained any MPG from those things. All they do is add noise and a bit of power.

[Avatard]

Give it to me at the pump, please. At least it's a more honest-feeling screwing.

I concur with this logic.

[Avatard]

LMAO..... no.

First, "short ram" is a dumb riceboy term. While the word "short" is indeed correct, there is absolutely no "ramming" going on with those things.

Just call it a cone filter on a pipe and be done with it.

Second, I've never gained any MPG from those things. All they do is add noise and a bit of power.

There's only two ways to "ram" anything into a motor (without a turbo- or super-charger compressor).

One is by sticking an intake in the wind.

The other is by using a column of air/fuel and the effects of gravity, as in "tunnel ram".

[Homeslice]

There's only two ways to "ram" anything into a motor (without a turbo- or super-charger compressor).

One is by sticking an intake in the wind.

The other is by using a column of air/fuel and the effects of gravity, as in "tunnel ram".

Exactly. And those "short ram intake" gheyness do neither.

All they do is suck in warm underhood air.

And those "heat shields" they sell don't help much.

In my day, we'd use a longer pipe that stretched almost all the way to the ground. Or tunneled it into a hole in the front spoiler.

[Avatard]

Actually, there's another place you can grab air. At the high pressure area at the center of the cowl (but this is known, not surprisingly, as cowl-induction).

[Homeslice]

Actually, there's another place you can grab air. At the high pressure area at the center of the cowl (but this is known, not surprisingly, as cowl-induction).

Yep, but it's more difficult to accomplish without cutting metal or buying a custom hood.

[101lifts2]

Mmm yes and stealing everyones hard earned money through the irs and then awarding it to baby factories and illegals works sooo much better. You're blind faith in that rolling whore we call government makes a fantastic argument towards manditory conscription in this country. Alas you won't even be able to connect those dots :rolleyes:

There are two sides to this coin Republicans and Democrats like to toss around yet each side is just as destructive. I do not believe in taxing anyone heavily to redistribute it to less fortunate (Democrats). And I do not like the government creating tax break legislation so corporations who contribute more campaign money (Republicans) benefit. Also, both like to mandate laws that force us to buy/pay for shit we do not need only to serve the pockets of campaign contributors.

Therefore, you are both right...and you are both wrong.

[Switch]

Mmm yes and stealing everyones hard earned money through the irs and then awarding it to baby factories and illegals works sooo much better. You're blind faith in that rolling whore we call government makes a fantastic argument towards manditory conscription in this country. Alas you won't even be able to connect those dots :rolleyes:

The rich are getting richer off the backs of the working class. Wake up.

[Papa_Complex]

Give it to me at the pump, please. At least it's a more honest-feeling screwing.

That's why they DON'T give it to you at the pump. If you really knew how much it was costing you, you (and about 300 million other people) would raise serious shit.

[OneSickPsycho]

The rich are getting richer off the backs of the working class. Wake up.

And taxing them to give it to the poorest people is going to stop that? How?

[Papa_Complex]

And taxing them to give it to the poorest people is going to stop that? How?

Hopefully by not having to take away as much from the the middle class, to do so.

[G-Rex]

The rich are getting richer off the backs of the working class. Wake up.

Have you ever worked for a poor person? No? Hmm..how 'bout that.

I think what alot of you aren't seeing is that while yes, a side effect of tax breaks is putting more money in the pockets of the people who control business, but that also enables those people to build plants and factories, create more opportunities for research, and, I know, what a novel idea, CREATE JOBS.

While alot of you don't care and probably haven't researched this at all or even have an idea, the oil companies do put money into renewable energy. While they may be the big bag dog on the block, we put them there, as we have an uncontrollable urge for big trucks, gas guzzling vehicles, and an administration that is in no way, shape, or form interested in allowing us to tap into our OWN natural resources.

Drill in Alaska? Sure, let's use the existing oil fields. Ever hear of directional drilling? Look it up. Drill in the Gulf? Sure. Nothing is without risk. I'm tired of hearing the activists complain about a lack of renewable energy, resources, or fuel prices when they know very little about what's going on. Idiots protest for the sake of jumping on the protest bandwagon without knowing the full story.

The more you know............now wake up.

[OneSickPsycho]

Hopefully by not having to take away as much from the the middle class, to do so.

For them to do anything significant for the middle class, they'd have to tax the rich out of existence...

Further, the way I see things going... that money will NEVER make it to the middle class, because all it's going to do is fund programs for the poorest folks... again, while us in the middle get fucked.

Consumption tax is the only real viable solution I see... Eliminate federal income taxes completely, and add a federal sales tax on everything except food. That generates revenue without outright stealing from people.

[Papa_Complex]

For them to do anything significant for the middle class, they'd have to tax the rich out of existence...

Further, the way I see things going... that money will NEVER make it to the middle class, because all it's going to do is fund programs for the poorest folks... again, while us in the middle get fucked.

Consumption tax is the only real viable solution I see... Eliminate federal income taxes completely, and add a federal sales tax on everything except food. That generates revenue without outright stealing from people.

I did say "hopefully" ;)

We aren't just talking about 'the rich' here, but primarily about large corporations that frequently pay anything from piss-all, to no tax at all. If you count the corporate welfare that some of them receive the government might well be paying them, to make massive profits.

[EpyonXero]

Trickle down economics is a fairy tale.

[Dave]

The rich are getting richer off the backs of the working class. Wake up.

Who do you think your beloved rulers are?

[OneSickPsycho]

I did say "hopefully" ;)

We aren't just talking about 'the rich' here, but primarily about large corporations that frequently pay anything from piss-all, to no tax at all. If you count the corporate welfare that some of them receive the government might well be paying them, to make massive profits.

I agree to a certain extent... you need to have a structure condusive to large business because they do help drive the economic engine in big ways... However, the corporate welfare shit has got to go... GE paying nothing in taxes? You've gotta be kidding me.

Again, simplify the system... flat tax businesses at a reasonable rate, cut out all the bullshit, and let the market determine who sinks/swims. Granted, they'll try to pass the buck to their employees and the consumer, but the market will eventually correct that.

Trickle down economics is a fairy tale.

What is your solution?

[OneSickPsycho]

Who do you think your beloved rulers are?

You didn't know? They give all of their money to the poor to set the example for the rest of us.

[Papa_Complex]

I agree to a certain extent... you need to have a structure condusive to large business because they do help drive the economic engine in big ways... However, the corporate welfare shit has got to go... GE paying nothing in taxes? You've gotta be kidding me.

Again, simplify the system... flat tax businesses at a reasonable rate, cut out all the bullshit, and let the market determine who sinks/swims. Granted, they'll try to pass the buck to their employees and the consumer, but the market will eventually correct that.

I like the flat tax or consumption tax models, but they simply don't give a government the stable operating budget that they need for day-to-day operations.

[Dave]

I like the flat tax or consumption tax models, but they simply don't give a government the stable operating budget that they need for day-to-day operations.

Me too. And government should be strictly limited to defense, as per the constitution

[Avatard]

Have you ever worked for a poor person? No? Hmm..how 'bout that.

I think what alot of you aren't seeing is that while yes, a side effect of tax breaks is putting more money in the pockets of the people who control business, but that also enables those people to build plants and factories, create more opportunities for research, and, I know, what a novel idea, CREATE JOBS.

While alot of you don't care and probably haven't researched this at all or even have an idea, the oil companies do put money into renewable energy. While they may be the big bag dog on the block, we put them there, as we have an uncontrollable urge for big trucks, gas guzzling vehicles, and an administration that is in no way, shape, or form interested in allowing us to tap into our OWN natural resources.

Drill in Alaska? Sure, let's use the existing oil fields. Ever hear of directional drilling? Look it up. Drill in the Gulf? Sure. Nothing is without risk. I'm tired of hearing the activists complain about a lack of renewable energy, resources, or fuel prices when they know very little about what's going on. Idiots protest for the sake of jumping on the protest bandwagon without knowing the full story.

The more you know............now wake up.

That's right, you fools! Make the rich richer, and they'll give you jobs!

I promise!

:skep:

Trickle down economics STILL doesn't work, STILL makes the rich even RICHER, and the poor even POORER.

Guess what? You're not rich. Guess what else? The likelihood you will be is better on getting hit by lightning.

Stop drinking the fucking Koolaid, and then telling people what you think they DON'T KNOW.

Fact is, YOU'RE the gullible one who's indulging a fucking financial fantasy fairytale; swallowed hook, line, and sinker, and yet you have the audacity to phrase things like you're educating OTHERS?

I'd keep more quiet, I'd hide the stupidity, if I were you. It's not becoming.

Actually, it is. It's becoming the undoing of this nation...

[Homeslice]

Getting back to the point of this article, so far no one has provided a justification for why an oil company should be treated like a manufacturing company for tax break purposes.

Other than powerful lobbying, of course.

[Avatard]

"Trickle-Down" (AKA "VooDoo") economics:

An American term, for how the rich piss on your head, and tell you it's raining.

[Switch]

Who do you think your beloved rulers are?

Why do you say "beloved"? I never said anything about loving my "rulers."

[Homeslice]

Too bad most rich people don't employ anyone. Rather, they get a salary (as a CEO, athlete, entertainer, investment banker, etc.).

The % of rich people who actually started their own business and hired a bunch of people is low.

Most get hired to do a specific job, then they last for about 18-36 months before bailing on a golden parachute.

And all the while, they are hiring accountants to figure out ways to lower their effective tax rate to that of a middle-class person (or even lower). Furthermore, many of them hide their investments overseas.

I used to be like you some of you guys.......I worshipped Reagan, thought he was cool, until I realized that the only reason I did so was because I wanted to "align" myself with "clean-cut upper-crust preppies", rather than what I perceived to be "burnouts" (hippie Democrats).

[goof2]

Reaganomics is bullshit. That POS was the one who introduced corporations into government.

Ever hear of "The Military-Industrial Complex"? That intermingling of corporations and government was around back when Reagan was still hosting a TV show.

[shmike]

Too bad most rich people don't employ anyone. Rather, they get a salary (as a CEO, athlete, entertainer, investment banker, etc.).

The % of rich people who actually started their own business and hired a bunch of people is low.

Most get hired to do a specific job, then they last for about 18-36 months before bailing on a golden parachute.

And all the while, they are hiring accountants to figure out ways to lower their effective tax rate to that of a middle-class person (or even lower). Furthermore, many of them hide their investments overseas.

I used to be like you some of you guys.......I worshipped Reagan, thought he was cool, until I realized that the only reason I did so was because I wanted to "align" myself with "clean-cut upper-crust preppies", rather than what I perceived to be "burnouts" (hippie Democrats).


Show your work 'slice.

Your thoughts are so erratic it is hard to counter them all.

CEO's don't have employees? Athletes and entertainers have golden parachutes?

Show me a person earning a 7, 8 or 9 figure income and paying a 4.7% effective rate and I'll show you a person the IRS is looking for.

Middle-income Americans are now paying federal taxes at or near historically low levels, according to the latest available data. That’s true whether it comes to their federal income taxes or their total federal taxes.

Income taxes: A family of four in the exact middle of the income spectrum will pay only 4.7 percent of its income in federal income taxes this year, according to a new analysis by the Urban Institute-Brookings Institution Tax Policy Center. This is the third-lowest percentage in the past 50 years, after 2008 and 2009.
Overall federal taxes: Middle-income households are paying overall federal taxes — which include income as well as payroll and excise taxes — at or near their lowest levels in decades, according to the latest data from the Congressional Budget Office (CBO).


http://www.cbpp.org/cms/index.cfm?fa=view&id=3151

[Homeslice]

I'm not sure why I need to show my work. I'm "middle class", or maybe "upper middle", and I paid what, 28-29% or whatever the heck my bracket is? I forgot.

I'm not a family, and I didn't have anything worth deducting this year, so my ability to reduce that is practically nill.

Not sure where they're getting 4.7% from.

And do you deny my claim that rich people are more likely to 1) use an accountant, 2) identify & make use of creative deductions, and 3) shelter money overseas?

[Homeslice]

By the way, yes CEO's have tons of subordinates, but in most cases they already existed before he came onboard.

ONLY if he successfully GROWS the business can he lay claim to helping create jobs.

[anthonyk]

Yeah, I think the misstep in logic is assuming that if you tax rich folks, you affect jobs. The personal taxation of a CEO isn't likely to affect the number of jobs available in their company. Taxing the company would have a bigger effect. Unless someone can prove a link between high-income income tax and job growth.

Not sure where they're getting 4.7% from.

It takes about 2 minutes of reading to find that out. It's the effective tax rate, after deductions and credits. BTW, the median income in 2010 according to them is a bit above $76k.

[Papa_Complex]

Yeah, I think the misstep in logic is assuming that if you tax rich folks, you affect jobs. The personal taxation of a CEO isn't likely to affect the number of jobs available in their company. Taxing the company would have a bigger effect. Unless someone can prove a link between high-income income tax and job growth.

It's one of those ideological assumptions, that's "so obvious" that people who agree with it, will never question it.

[shmike]

I'm not sure why I need to show my work. I'm "middle class", or maybe "upper middle", and I paid what, 28-29% or whatever the heck my bracket is? I forgot.

I'm not a family, and I didn't have anything worth deducting this year, so my ability to reduce that is practically nill.

Not sure where they're getting 4.7% from.

And do you deny my claim that rich people are more likely to 1) use an accountant, 2) identify & make use of creative deductions, and 3) shelter money overseas?


When you use words like "most" and "the % of..." you should post numbers.

The quote tells you EXACTLY where they got the 4.7% figure from.

A single person with a decent income gets hit the hardest on taxes. That same person with children, mortgage interest, education expenses, etc. can have an effective taxe rate of 0% (just ask Paul).

I don't disagree that the rich use accountants and deductions not used by Joe average $50k/year.

However, if you think that a ball player, actor, business owner or hot shot banker, attorney or plastic surgeon earning $5mil a year has some magical offshore bank account into which their earnings are paid and not taxed, you are off your rocker.

[Homeslice]

That same person with children, mortgage interest, education expenses, etc. can have an effective taxe rate of 0% (just ask Paul)..

I'm aware of that, but not everyone has that ability. As I stated, I don't.

And my point was, plenty of "rich" people could easily bring their effective rate down below mine, by using creative deductions. The more assets you own, and the more business endeavors you're involved in, the more likely you or your accountant will be able to dream up "creative" deductions.


However, if you think that a ball player, actor, business owner or hot shot banker, attorney or plastic surgeon earning $5mil a year has some magical offshore bank account into which their earnings are paid and not taxed, you are off your rocker.
I only said they were more LIKELY to, compared to the middle class.

Bottom line is, I don't feel sorry for rich people. They have more freedom & opportunity to GET rich in this country than practically any other.

[shmike]

And my point was, plenty of "rich" people who ordinarily would be in the 35% bracket could easily bring their effective rate down below mine.



And I'm telling you that you are wrong.

To get below the 28% bracket, your AGI would have to be below $82,400 (Single, year 2010). Deductions, creative accounting, etc., your average $1mil plus earner is not paying taxes on $82k or less of income.



Bottom line is, I don't feel sorry for rich people. They have more freedom & opportunity to GET rich in this country than practically any other.

Truth.

Same goes for poor people.

Ain't this country great? :pat:

[OneSickPsycho]

I'm aware of that, but not everyone has that ability. As I stated, I don't.

And my point was, plenty of "rich" people could easily bring their effective rate down below mine, by using creative deductions.


I only said they were more LIKELY to, compared to the middle class.

Bottom line is, I don't feel sorry for rich people. They have more freedom & opportunity to GET rich in this country than practically any other.

I don't think anyone here feels sorry for rich people, but it sure does seem as if there's a lot of people (here and elsewhere) who have a vendetta against them...

For me, it comes down to this... it's unfair to FORCE people to pay more, just because they have more. Asking is one thing... Stealing is another.

[Homeslice]

And I'm telling you that you are wrong.

To get below the 28% bracket, your AGI would have to be below $82,400 (Single, year 2010). Deductions, creative accounting, etc., your average $1mil plus earner is not paying taxes on $82k or less of income.


IIRC, they pay 33% on anything above $175K, and 35% on everything above $360K. It isn't like they are paying those rates on their entire income.

[Papa_Complex]

I don't think anyone here feels sorry for rich people, but it sure does seem as if there's a lot of people (here and elsewhere) who have a vendetta against them...

For me, it comes down to this... it's unfair to FORCE people to pay more, just because they have more. Asking is one thing... Stealing is another.

Funny though, isn't it, how many massive financial empires were founded in times of truly onerous taxation though, isn't it?

http://www.truthandpolitics.org/top-rates.php

[shmike]

IIRC, they pay 33% on anything above $175K, and 35% on everything above $360K. It isn't like they are paying those rates on their entire income.

No shit.

What's your point?

Just like you didn't pay 28% on your entire income.

[anthonyk]

For me, it comes down to this... it's unfair to FORCE people to pay more, just because they have more. Asking is one thing... Stealing is another.

Stealing? :skep:

The government shouldn't have the ability to enforce current tax laws (however unfair they may seem)? Because that seems to be all that's happening. Don't like the laws? Work to change them.

[goof2]

I'm not sure why I need to show my work. I'm "middle class", or maybe "upper middle", and I paid what, 28-29% or whatever the heck my bracket is? I forgot.

I'm not a family, and I didn't have anything worth deducting this year, so my ability to reduce that is practically nill.

Not sure where they're getting 4.7% from.

And do you deny my claim that rich people are more likely to 1) use an accountant, 2) identify & make use of creative deductions, and 3) shelter money overseas?

If you are talking about your tax bracket (otherwise known as your marginal tax rate) that is irrelevant. That only shows at what rate the last dollar you made that year was taxed.

The somewhat more relevant number is your effective tax rate, the percentage of taxes you paid out of your taxable income, and that isn't perfect either. Compare two people with the same family situation and income. Dude 1 (D1) contributes nothing to his 401k while Dude 2 (D2) contributes 10% of his pre-tax income. D1 will have a higher effective tax rate due to his own decision. Say D1 also rents while D2 bought real estate through a mortgage. D1 can't deduct anything while D2 can deduct the interest, property tax, and some other expenses he pays. Those to factors alone, and there are a ton of them, can affect the taxable income between the two by $10,000, $20,0000, or even more despite their gross income being the same. Additionally that money will be taxed in the top one or two brackets they are subjected to, meaning it will make the largest difference in their effective tax rates.

In the above scenario D1 isn't getting screwed by the government. He can end up with significantly more tax liability than D2 and has nothing to blame other than his own decisions.

[Homeslice]

If you are talking about your tax bracket (otherwise known as your marginal tax rate) that is irrelevant. That only shows at what rate the last dollar you made that year was taxed.

The somewhat more relevant number is your effective tax rate, the percentage of taxes you paid out of your taxable income, and that isn't perfect either. Compare two people with the same family situation and income. Dude 1 (D1) contributes nothing to his 401k while Dude 2 (D2) contributes 10% of his pre-tax income. D1 will have a higher effective tax rate due to his own decision. Say D1 also rents while D2 bought real estate through a mortgage. D1 can't deduct anything while D2 can deduct the interest, property tax, and some other expenses he pays. Those to factors alone, and there are a ton of them, can affect the taxable income between the two by $10,000, $20,0000, or even more despite their gross income being the same. Additionally that money will be taxed in the top one or two brackets they are subjected to, meaning it will make the largest difference in their effective tax rates.

In the above scenario D1 isn't getting screwed by the government. He can end up with significantly more tax liability than D2 and has nothing to blame other than his own decisions.

There are plenty of rich people don't own a home either.

The idea that someone should buy a home just because of the deduction opportunities is rather lacking (although I doubt that's what you actually think).

I see your point about 401k's though. Those contributions, along with the standard deduction and personal deduction, are going to be a much bigger benefit to a middle class person than they would to a rich person.

[OneSickPsycho]

Stealing? :skep:

The government shouldn't have the ability to enforce current tax laws (however unfair they may seem)? Because that seems to be all that's happening. Don't like the laws? Work to change them.

No, the government should have the ability to enforce laws... however, the picking and choosing of what laws to enforce really chaps my ass (but that's another conversation)...

I don't like the laws and I will continue to vote for folks who I feel will provide the best opportunity to change them...

Income taxes, by definition is theft. You take something that isn't yours, without permission... actually by force... that's the definition of stealing. Laws or no laws.

[EpyonXero]

What is your solution?

Stop handing them tax money.

[goof2]

There are plenty of rich people don't own a home either.

The idea that someone should buy a home just because of the deduction opportunities is rather lacking (although I doubt that's what you actually think).

I see your point about 401k's though. Those contributions, along with the standard deduction and personal deduction, are going to be a much bigger benefit to a middle class person than they would to a rich person.

You are right, that isn't what I think. Notice I didn't judge the decisions of either D1 or D2, I only stated that those decisions are directly responsible for large differences in their effective tax rates.

I also don't care about whether "the rich" own homes or not. I was simply trying to point out the futility of judging the tax system through "I paid this much in taxes" anecdotes.

[OneSickPsycho]

Stop handing them tax money.

'them' as in rich people? Like we are taxing the rich to give it to... the rich?

I don't see them being handed money... They are more clever in filing their taxes so they can keep more of the money they earned, maybe.

The whole thing boils down to a simple principle for me... does someone have a right to what I've earned, more than me?

I don't mind chipping in some money to run things, but it's completely out of control. There's never a realistic plan for how to pay for a bunch of this shit that we don't need, but we keep spending anyway... At the end of the day, rather than really sitting down and making responsible budgeting decisions, the answer is more debt and more taxes.

Regardless of which side of the fence you are on... it boils down to that simple principle... is it OK for your money to be arbitrarily taken from you, without you having any say in the matter?

In that case, I think I'll come over to your house and raid your fridge, because the guy next door is hungry... and you can't do shit about it other than bicker about how I should have taken it from someone with a bigger fridge.

[Homeslice]

You are right, that isn't what I think. Notice I didn't judge the decisions of either D1 or D2, I only stated that those decisions are directly responsible for large differences in their effective tax rates.

I also don't care about whether "the rich" own homes or not. I was simply trying to point out the futility of judging the tax system through "I paid this much in taxes" anecdotes.

Cool.

[Sixxxxer]

Thrilling Thread. You guys should all be correspondents on Fox news.

Lets face facts, NOTHING you do say or feel will change a goddamn thing this country or any country in the world will operate. If gas goes up to 20 Dollars a gallon, People will still buy it. as an entire population, the vast majority are sheep being herded into there untimely demise. The only thing that can control the price of anything is regulation, and our government would rather worry about Illegal MP3 Files than trying to control the price of gas.

I've given up on society...The world is fucked...and no politician or world leader is going to convince me otherwise.

You really wanna stick it to the man? Buy a brand new pair of Nike's or a Huffy and stop relying on gas as a source of transportation. But as Captain already posted...in some cases thats not entirely possible and thats where the oil tycoons and world leaders know they have us by the balls.

[Avatard]

Ride more motorcycles, save gas! Do your part!

LOL...

[Sixxxxer]

Honestly, My bike personally isnt THAT great on gas. Its better than my truck but in terms of good fuel economy...I'd be better off on a 250 or 500 that doesnt rev as high.

bc lets face it, when im on my bike it pains me to putter around town and ride it like its a scooter.

[Homeslice]

If gas goes up to 20 Dollars a gallon, People will still buy it.

Sure, just not as much.

There's no such thing as a product with perfectly inelastic demand.

People just need to man up. You don't NEED to drive to 5 different grocery stores, when 1 will do. You don't NEED to drive alone, when carpooling would work. You don't NEED a big home in the suburbs, when an urban condo would work.

[Sixxxxer]

Sure, just not as much.

There's no such thing as a product with perfectly inelastic demand.

People just need to man up and quit crying. You don't NEED to drive to 5 different grocery stores, when 1 will do. You don't NEED to drive alone, when carpooling would work.

Not every single person has these options. I have no carpooling options to and from work...at all. I dont even have the ability to take public transportation to and from work.

So what do i do to get there? Drive or Ride. sure i could find a new job...but its not as easy as saying it.

we dont NEED 400 dollar smartphones and 800 Dollar Flat screen TV's...but there nice to have...would you sell less gas if it was 20 dollars a gallon? Sure...but the point is people would still buy it.

If theres a gas station on one side of the road and a gas staton on the other side and one had gas for 3 dollars and another had it for 3.25 the guy selling it for 3.25 would still get buisness...Why? bc people who are to lazy to make the left or right into the cheaper gas station bc its not on there side of the road and the 3.25 station is "easier" to get to...Trust me I've seen it many times.

[tommymac]

If theres a gas station on one side of the road and a gas staton on the other side and one had gas for 3 dollars and another had it for 3.25 the guy selling it for 3.25 would still get buisness...Why? bc people who are to lazy to make the left or right into the cheaper gas station bc its not on there side of the road and the 3.25 station is "easier" to get to...Trust me I've seen it many times.

You live in New Jersey where it takes an hr and a 5 mile drive to turn around to get to the other side of the road :lol:

I do agree with what youre saying to an extent. Gas prices are rising but most peoples incomes are not, so now more will be spent on fuel which means less will be spent/saved elsewhere. Businesses will eventualy feel that pinch too and start raising their prices too so it all has a snowball effect. We started seeing some of that in 08 with all the fuel surcharges as gas prices skyrocketed.

[EpyonXero]

Sure, just not as much.

There's no such thing as a product with perfectly inelastic demand.

People just need to man up. You don't NEED to drive to 5 different grocery stores, when 1 will do. You don't NEED to drive alone, when carpooling would work. You don't NEED a big home in the suburbs, when an urban condo would work.

If people cant afford it they wont buy it thats an absolute fact. During th recession oil demand dropped pretty significantly.

http://greenecon.net/dramatic-drop-in-oil-consumption-%E2%80%93-what%E2%80%99s-the-implication/energy_economics.html

[Homeslice]

If people cant afford it they wont buy it thats an absolute fact. During th recession oil demand dropped pretty significantly.

http://greenecon.net/dramatic-drop-in-oil-consumption-%E2%80%93-what%E2%80%99s-the-implication/energy_economics.html

A lot of that was reduced demand of anything using petroleum in its ingrediants (rubber, plastic, etc.), as well as less diesel fuel shipping stuff around

And I seem to recall a lot of people here and on CF who claimed that higher gas prices would never affect anyone's decision-making. Now all of a sudden you see many of those same people with more fuel-efficient vehicles. Hmm.

[shmike]

A lot of that was reduced demand of anything using petroleum in its ingrediants (rubber, plastic, etc.), as well as less diesel fuel shipping stuff around

And I seem to recall a lot of people here and on CF who claimed that higher gas prices would never affect anyone's decision-making. Now all of a sudden you see many of those same people with more fuel-efficient vehicles. Hmm.

Those were probably the same people on CF saying that real estate was the only way to amass wealth and that it ALWAYS goes up in value.

Those guys don't post anymore, their computers have all been repossessed. :lol:

[Homeslice]

:lol There was a guy like that on our local forum. Always bragging about his success as a flipper (with a track record of 2 flips). This was back in 2006. Haven't seen him around anymore. :lol:

[Sixxxxer]

If people cant afford it they wont buy it thats an absolute fact. During th recession oil demand dropped pretty significantly.

http://greenecon.net/dramatic-drop-in-oil-consumption-%E2%80%93-what%E2%80%99s-the-implication/energy_economics.html

Yes and No, Demand dropped because shit hit the fan with MORE than just the price of gas...but lets face it if you have to go somewhere you NEED gas.


And if they cant afford it, then they steal it. Working at a gas station, i had to deal with it on a hourly basis from day to day...people claim they only said ten and yet they watched the gas pump fill there escalade all the way up till it was 80 dollars...yet they only have ten dollars on them...Right...And I'm the fucking tooth fairy on my days off.

I'd love to carpool, Hell Id love to walk to work or ride a bike...but I cant. So i buy gas because I have no other choice at the moment.

[101lifts2]

Yes and No, Demand dropped because shit hit the fan with MORE than just the price of gas...but lets face it if you have to go somewhere you NEED gas.


And if they cant afford it, then they steal it. Working at a gas station, i had to deal with it on a hourly basis from day to day...people claim they only said ten and yet they watched the gas pump fill there escalade all the way up till it was 80 dollars...yet they only have ten dollars on them...Right...And I'm the fucking tooth fairy on my days off....

Every pump I've encounted nowadays shuts off automatically when the dollar amount paid reaches the set point. Can't see stealing gas as an issue any longer.

....I'd love to carpool, Hell Id love to walk to work or ride a bike...but I cant. So i buy gas because I have no other choice at the moment.

You also like to drive a big gas hog Dodge Ram too...:lol:redflip

[Sixxxxer]

Every pump I've encounted nowadays shuts off automatically when the dollar amount paid reaches the set point. Can't see stealing gas as an issue any longer.



You also like to drive a big gas hog Dodge Ram too...:lol:redflip

Ok let me break it down for you...Yes your right it does shut off when you set the amount..but when you say fill and then AFTER it fills you try and tell me you really said you wanted 10, 15, 20 dollars and its my fault...Then your stealing.

Remember...NJ We pump the gas for you...so its a little different in our situation. People do it ALL the time and as a company...they just want us to eat it and let the customer go...It's Bullshit bc it will happen more often the higher the price goes.


And Yes, again...i choose to drive my Dodge ram...why? Bc I can...You dont really see me bitching anywhere in here about it. I love my truck. Im fully aware of what i pay when i put gas in it...But i also have the chance to drive a Hyundai elantra at time if need be...and my bike. So really its not as big an issue as one would think.

[EpyonXero]

Yes and No, Demand dropped because shit hit the fan with MORE than just the price of gas...but lets face it if you have to go somewhere you NEED gas.


And if they cant afford it, then they steal it. Working at a gas station, i had to deal with it on a hourly basis from day to day...people claim they only said ten and yet they watched the gas pump fill there escalade all the way up till it was 80 dollars...yet they only have ten dollars on them...Right...And I'm the fucking tooth fairy on my days off.

I'd love to carpool, Hell Id love to walk to work or ride a bike...but I cant. So i buy gas because I have no other choice at the moment.

If you cant afford it you wont buy it. It doesnt matter if you cant afford it because you lost your job or because it costs $150 to fill your car. The point is that demand can go down.

[101lifts2]

Ok let me break it down for you...Yes your right it does shut off when you set the amount..but when you say fill and then AFTER it fills you try and tell me you really said you wanted 10, 15, 20 dollars and its my fault...Then your stealing.....

The fuel station needs to recieve the money first unless it wishes to keep getting burned. :idk:

[Sixxxxer]

Demand wont ever go down far enough for it to matter. the oil companies will still make billions.

[Sixxxxer]

The fuel station needs to recieve the money first unless it wishes to keep getting burned. :idk:

It's different in NJ. if you pull up to a pump and I walk up to your windown and you say Fill it regular...Cash. How am I going to know how much will fit in your tank? I dont...So we pump it into the car then when its done we tell you the total.

very easy to say I messed up and put the wrong amount in your car and that all you "have" is 10 dollars.

Trust me it happens...All day many times...in the state on NJ, and Most likely Oregon. And I'm sure there are self serve places while not many but im sure SOME still exist where you can get the gas into your car before paying for it.

[zerioustt]

Demand wont ever go down far enough for it to matter. the oil companies will still make billions.

eggzackery


The oil companies know how far to push the limits of peoples wallets. They wont push it to far to reduce the demand, thats not smart business. They didnt get rich by accident.

[goof2]

eggzackery


The oil companies know how far to push the limits of peoples wallets. They wont push it to far to reduce the demand, thats not smart business. They didnt get rich by accident.

Oil companies have little control over the price of oil. It is bought and sold on the open market and varies based on beliefs about supply and demand. While it does benefit them when oil is over $110 per barrel like now or was over $145 per barrel for a short time in the summer of 08 that doesn't mean they have control over it.

If oil companies could control it why would they let it drop to $40 per barrel and below in the winter of 09? Why would they have let oil stay below $20 per barrel for practically an entire decade in the 90s?

The closest any organization comes to having control over prices is OPEC and even what they can do is limited. There just isn't any nefarious group able to exercise an invisible hand to set oil prices. If there were that group would have had to have been pretty damn dumb to keep prices as low as they did up until a few years ago.

A few of the facts affecting oil prices are that oil production is static or shrinking, that doesn't look like it will change anytime soon, demand for oil is increasing, that doesn't look like it will change anytime soon either, some of the places a lot of oil comes from aren't exactly stable so neither is their supply, the dollar is crapping out which makes buying oil with dollars more expensive, and inflation is occurring while interest rates are effectively nothing which drives investors to commodities. That is a hell of a run on sentence but what it means is there is nothing, outside of the possibility of the American economy tanking again soon, that really justifies price decreases.

Look at price changes over the last year for gold, silver, and copper. You can throw in corn, soybeans, wheat, and coffee too. Most commodities cost much more in dollars than they did 12 months ago. If the oil companies were controlling oil prices they are doing a hell of a job on that other stuff too.

[Papa_Complex]

At street level, oil companies seem to have a fair bit of control over retail price. A couple of weeks back, on my first trip of the season to the track, I found that gas was fully CAN$0.10/L (US$0.40/US gal) more expensive in the city, than it was at the highway-side clip joints that usually charge $0.05/L MORE.

[goof2]

At street level, oil companies seem to have a fair bit of control over retail price. A couple of weeks back, on my first trip of the season to the track, I found that gas was fully CAN$0.10/L (US$0.40/US gal) more expensive in the city, than it was at the highway-side clip joints that usually charge $0.05/L MORE.

So you think for some reason an oil company decided to charge one station more than another for refined gasoline? Oil companies do not set prices at the retail level. Retail gas stations are free to charge whatever they want but most stations in an area end up with similar prices because they have to compete with each other for customers.

That doesn't mean there aren't anomalies though. There is a station over in Orlando that was charging over $5.50 per gallon while the average in Florida is around $4 per gallon. They didn't set that price because an oil company told them to, they did it because they are the closest gas station to the airport and wanted to screw people who had to return rental cars with full tanks.

Each retail gas station controls the price they want to charge, they are controlling the price of gas not oil, and they are not told what to charge by oil companies.

[Papa_Complex]

Unless the oil company owns the gas station.

[shmike]

I spoke to a station owner the other day and asked him how the higher prices affect his business from a margin perspective.

I didn't realize it until he said it but the higher the prices go, the more he has to charge just to keep the margins the same.

I realize that he is not an "oil company" but your average customer thinks that at $4/gal the guy at the local Mobil is raking it in vs. $3/gal when in reality, the opposite is true.

[goof2]

Unless the oil company owns the gas station.

Even then you think the retail prices (again, for gas not oil) for each individual station owned by the oil company are set at the corporate level? They could possibly set policies of a certain % above cost for all stations, but it would make little sense.

[EpyonXero]

I spoke to a station owner the other day and asked him how the higher prices affect his business from a margin perspective.

I didn't realize it until he said it but the higher the prices go, the more he has to charge just to keep the margins the same.

I realize that he is not an "oil company" but your average customer thinks that at $4/gal the guy at the local Mobil is raking it in vs. $3/gal when in reality, the opposite is true.

But lets say the station owner filled his tanks @ $2.50/g on Monday and by Friday average gas prices are $2.75/g. He can now sell his $2.50 gas for $2.75. Thats a 10% a gallon profit on top of the usual margin. Im not saying theres anything wrong with that but I dont buy that the local guys arent making any money when prices go up.