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So the main point is about questionable valuation of companies to avoid capital gains tax, right? Because if there's a company (in this case a sole proprietors

So the main point is about questionable valuation of companies to avoid capital gains tax, right? Because if there's a company (in this case a sole proprietorship) that reports business expenses exceeding income, what is there to tax? Can some chime in to say what's the matter with tax write-offs portrayed as unfair gains? I mean, you still have to pay for the written-off stuff. As I understand, you're not better off just deciding to spend money on the basis of it being tax deductible. It'd make only sense if you're going to spend the money anyway.

maxbond 5y ago
Avoiding paying taxes because you lost money doing something destructive, that we as a society have to bear the cost for by living in a damaged environment, is a form of double dipping. It externalizes risks while keeping gains private.
- gruez 5y ago
  >Avoiding paying taxes because you lost money doing something destructive But in this case her being able to avoid paying taxes isn't really because she did something destructive, it's because her business did badly. If gambled all her money on meme stocks or whatever, and lost, she would be able to claim the same deduction. The main issue here seems to be that valuations can be fudged to maximize tax savings, not that you can avoid taxes after causing an oil spill. >It externalizes risks while keeping gains private. but her company already paid fines for it?
  - lordnacho 5y ago
    I think the suggestion is that if the company had been fined, there wouldn't be a tax deduction. So why wasn't the settlement structured as a big fine, rather than a cleanup expense?
- rhino369 5y ago
  If she's not adequately paying the costs, that issue should be resolved directly. But business deductions aren't really avoiding taxation. It's more accurately calculating your profits so the taxation can be calculated.
titusjohnson 5y ago
Because if there's a company (in this case a sole proprietorship) that reports business expenses exceeding income, what is there to tax? The objection is to the idea that you can fuck up the world for everyone else and somehow mischaracterize the cleanup of that fuckup as a "normal business expense". The cleanup of an oil spill should come from post-tax profits, the burden should 100% be on the company. They made their profits from the extraction of common resources, they can restore the common resources to a healthily state. If it is economically unviable to do so, well, I guess you shouldn't be extracting those common resources then. If the company cannot afford to perform the cleanup it should be nationalized and sold off until the cleanup can be funded. I'm heavily in favor of this also applying to the Board and Investors in the company, there needs to be real consequences with being involved in world-destroying corporate fuckups. Ideally to the point that being on the Board of an Energy Company carries the very real consequence of flipping burgers for the rest of your days should the company you are supposed to be overseeing fucks up badly enough. The objection is to the idea that one can somehow come out ahead while also fucking the world up for everyone else. The objection is to the complete and total lack of Consequences for Actions.
- gruez 5y ago
  >The cleanup of an oil spill should come from post-tax profits, the burden should 100% be on the company. or maybe that's already baked into the fine? In other words fine for a bad: $1000 average tax rate: 30% new fine ("from post-tax profits"): $1300 alternatively, the "real" price of the fine: $769.23
- ChrisLomont 5y ago
  > mischaracterize the cleanup of that fuckup as a "normal business expense" An alternative is to go out of business and leave the total cleanup costs to society instead of paid for out of future profits. Which is better? >If the company cannot afford to perform the cleanup it should be nationalized and sold off until the cleanup can be funded. That mindset adds SuperFund sites - destroy the actor without being able to extract profits over longer periods of time. >Ideally to the point that being on the Board of an Energy Company carries the very real consequence of flipping burgers for the rest of your days And as you drive the risk so high capital will flee the sector, we'll ultimately have higher energy costs and worse technology as places that don't view the world so black and white use a nuanced approach. Then when energy is too costly for the poor, we can screw em or nationalize more things to help them, right? Seems this recipe has been tried places...
dkdk8283 5y ago
There’s nothing wrong with write offs, about half of my income is paid to the government. I will always do everything I can to minimize my tax liability, and it’s natural to do so.
- lostlogin 5y ago
  Does this include fighting to keep an oil well leaking?
  - dkdk8283 5y ago
    The climate comments here are virtue signaling. Like it or not it was completely legal. There is a price for everything, including human lives. Lose a limb? Eye? There’s a price for it all, even a oil spill. Whether it’s enough is an entirely different conversation.
    - arrosenberg 5y ago
      > The climate comments here are virtue signaling. What a convenient way to shut down a valid argument. The whole thrust is that the incentives are encouraging negative externalities by legalizing them and providing tax breaks for polluting. I don't like it, and it should be called out - more people need to be aware that these things keep happening because it's benefitting some rich knob.
    - sva_ 5y ago
      > Like it or not it was completely legal. Pretty sure that's the exact point that people are lamenting.
    - lostlogin 5y ago
      > The climate comments here are virtue signaling. Like it or not it was completely legal. Laws come and go. It’s not hard to think of things that seem blatantly wrong now, that were formerly legal. Do we describe those that wanted the law changes that have since occurred as ‘virtue signalling’? Making money by pouring oil into the environment seems pretty clearly wrong. I’d argue that the behaviour of the protagonists in the article is virtue signalling, they are seemingly doing good things for their community while actually damaging the place.
quantified 5y ago
Treating a valuation as if it was actual income is highly misleading. If you inherit something without paying a tax in the gain in value, fine. But being able to declare your basis in it at the newly gained value allow taxes on its eventual sale to skip a massive gain in value. That is the sketchiest aspect IMHO.

maxbond 5y ago

Avoiding paying taxes because you lost money doing something destructive, that we as a society have to bear the cost for by living in a damaged environment, is a form of double dipping. It externalizes risks while keeping gains private.

gruez 5y ago
>Avoiding paying taxes because you lost money doing something destructive But in this case her being able to avoid paying taxes isn't really because she did something destructive, it's because her business did badly. If gambled all her money on meme stocks or whatever, and lost, she would be able to claim the same deduction. The main issue here seems to be that valuations can be fudged to maximize tax savings, not that you can avoid taxes after causing an oil spill. >It externalizes risks while keeping gains private. but her company already paid fines for it?
- lordnacho 5y ago
  I think the suggestion is that if the company had been fined, there wouldn't be a tax deduction. So why wasn't the settlement structured as a big fine, rather than a cleanup expense?
rhino369 5y ago
If she's not adequately paying the costs, that issue should be resolved directly. But business deductions aren't really avoiding taxation. It's more accurately calculating your profits so the taxation can be calculated.

titusjohnson 5y ago

Because if there's a company (in this case a sole proprietorship) that reports business expenses exceeding income, what is there to tax? The objection is to the idea that you can fuck up the world for everyone else and somehow mischaracterize the cleanup of that fuckup as a "normal business expense". The cleanup of an oil spill should come from post-tax profits, the burden should 100% be on the company. They made their profits from the extraction of common resources, they can restore the common resources to a healthily state. If it is economically unviable to do so, well, I guess you shouldn't be extracting those common resources then. If the company cannot afford to perform the cleanup it should be nationalized and sold off until the cleanup can be funded. I'm heavily in favor of this also applying to the Board and Investors in the company, there needs to be real consequences with being involved in world-destroying corporate fuckups. Ideally to the point that being on the Board of an Energy Company carries the very real consequence of flipping burgers for the rest of your days should the company you are supposed to be overseeing fucks up badly enough. The objection is to the idea that one can somehow come out ahead while also fucking the world up for everyone else. The objection is to the complete and total lack of Consequences for Actions.

gruez 5y ago
>The cleanup of an oil spill should come from post-tax profits, the burden should 100% be on the company. or maybe that's already baked into the fine? In other words fine for a bad: $1000 average tax rate: 30% new fine ("from post-tax profits"): $1300 alternatively, the "real" price of the fine: $769.23
ChrisLomont 5y ago
> mischaracterize the cleanup of that fuckup as a "normal business expense" An alternative is to go out of business and leave the total cleanup costs to society instead of paid for out of future profits. Which is better? >If the company cannot afford to perform the cleanup it should be nationalized and sold off until the cleanup can be funded. That mindset adds SuperFund sites - destroy the actor without being able to extract profits over longer periods of time. >Ideally to the point that being on the Board of an Energy Company carries the very real consequence of flipping burgers for the rest of your days And as you drive the risk so high capital will flee the sector, we'll ultimately have higher energy costs and worse technology as places that don't view the world so black and white use a nuanced approach. Then when energy is too costly for the poor, we can screw em or nationalize more things to help them, right? Seems this recipe has been tried places...

dkdk8283 5y ago

There’s nothing wrong with write offs, about half of my income is paid to the government. I will always do everything I can to minimize my tax liability, and it’s natural to do so.

lostlogin 5y ago
Does this include fighting to keep an oil well leaking?
- dkdk8283 5y ago
  The climate comments here are virtue signaling. Like it or not it was completely legal. There is a price for everything, including human lives. Lose a limb? Eye? There’s a price for it all, even a oil spill. Whether it’s enough is an entirely different conversation.
  - arrosenberg 5y ago
    > The climate comments here are virtue signaling. What a convenient way to shut down a valid argument. The whole thrust is that the incentives are encouraging negative externalities by legalizing them and providing tax breaks for polluting. I don't like it, and it should be called out - more people need to be aware that these things keep happening because it's benefitting some rich knob.
  - sva_ 5y ago
    > Like it or not it was completely legal. Pretty sure that's the exact point that people are lamenting.
  - lostlogin 5y ago
    > The climate comments here are virtue signaling. Like it or not it was completely legal. Laws come and go. It’s not hard to think of things that seem blatantly wrong now, that were formerly legal. Do we describe those that wanted the law changes that have since occurred as ‘virtue signalling’? Making money by pouring oil into the environment seems pretty clearly wrong. I’d argue that the behaviour of the protagonists in the article is virtue signalling, they are seemingly doing good things for their community while actually damaging the place.

quantified 5y ago

Treating a valuation as if it was actual income is highly misleading. If you inherit something without paying a tax in the gain in value, fine. But being able to declare your basis in it at the newly gained value allow taxes on its eventual sale to skip a massive gain in value. That is the sketchiest aspect IMHO.