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Tax claims, usually. Spent X dollars on fuel for farming or mining? Here's Y dollars off your tax bill.
by jdub 7y ago
Tax claims, usually. Spent X dollars on fuel for farming or mining? Here's Y dollars off your tax bill.
- whatshisface 7y agoIsn't every business allowed to depreciate their purchases?
- jdub 7y agoSpending money on a commodity isn't like buying a mainframe. And these are specific deductions and claims for fossil fuel products.
- guan 7y agoFor land producing minerals, there is a special tax rule called “percentage depletion” available to some taxpayers. With percentage depletion, the owner can deduct a fixed percentage (15%) of gross income every year. This can add up to more than the original amount invested in an oil field. Normally, the depreciation allowance for capital investment over a period of years can only add up to the amount originally invested.
- tim333 7y agoIf the business has to pay tax to the government it isn't really a subsidy, which I think it usually the case with oil and gas. The UK govt seems to have received £1.2 bn from the oil and gas businesses in 2018/19. (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/818296/Statistics_of_government_revenues_from_UK_oil_and_gas_production_July_2019.pdf https://assets.publishing.service.gov.uk/government/uploads/...)
- jdub 7y agoWhile there are some direct incentives for fossil fuel producers, most of the subsidies go to commercial use of fossil fuel products.
- KirinDave 7y agoWhy? The net effect is exactly the same.
- tim333 7y agoGovernment takes money from business = tax Government gives money to business = subsidy The oil industry is the first one even if depreciation allowances are involved in the tax calculation.
- greglindahl 7y agoYou might want to check out the concept of a Tax Expenditure https://en.wikipedia.org/wiki/Tax_expenditure https://en.wikipedia.org/wiki/Tax_expenditure, which is when a government lowers tax on something.
- tim333 7y agoIt's still an odd use of the word subsidy. I wish I could subsidise the oil industry by having them send me large amounts of money. Maybe we can kill the oil industry by tripling the subsidies so they have to send the government three times as much? It makes it hard to have sensible discussion. Is there a word for whether the government pays to the industry or visa versa if tax and subsidy have been redefined to no longer mean that?