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Thought experiment: If these "amortizations schedules" didn't already exist, would there be any chance we would introduce them today, given how profitable and s

Thought experiment: If these "amortizations schedules" didn't already exist, would there be any chance we would introduce them today, given how profitable and successful oil and gas businesses are and most certainly would still be without these subsidies?

megaman821 4y ago
Yes, or we would build less things like battery factories that can take up to four years to fully ramp up.
IncRnd 4y ago
Of course. Everyone in every industry and most personal tax forms spread out the costs of assets over the lifetime of the assets. Thought experiment: What do you think would happen if people and companies could not spread the costs of their assets out over time?
- ElevenLathe 4y ago
  They would have huge losses in the years that they invested in things, and huge profits in the years the investments paid off. This might result in more or less tax revenue depending on exactly how the rest of the tax code is structured (or restructured).
  - twicetwice 4y ago
    Which would mean that only people/companies who can afford to weather huge losses (potentially for several consecutive years) are able to enter capital-intensive sectors, providing massive moats to incumbents in those sectors and even more advantages to people who are already wealthy.
    - ElevenLathe 4y ago
      Right, but isn't this good when we are talking about fossil fuel companies? Fair competition drives down the price of fossil energy, while our goal as a civilization should be to raise the price as much as we can stand (to infinity if possible!) so that we don't cook ourselves. You can therefore make the argument (though I don't agree with it myself) that subsidies to big oil that reduce competition from upstarts is, in a twisted way, a climate-positive policy. This of course fails because subsidizing big, publicly-traded oil companies reduces their cost of capital. This causes rational capital allocators to rationally invest in fossil fuel exploration, resulting in more carbon being dug out of the ground and added to the atmosphere.
    - vineyardmike 4y ago
      Or companies with venture capital? Something that seems easy if you’re literally pumping oil.
  - deleted 4y ago
    [deleted]

megaman821 4y ago

Yes, or we would build less things like battery factories that can take up to four years to fully ramp up.

IncRnd 4y ago

Of course. Everyone in every industry and most personal tax forms spread out the costs of assets over the lifetime of the assets. Thought experiment: What do you think would happen if people and companies could not spread the costs of their assets out over time?

ElevenLathe 4y ago
They would have huge losses in the years that they invested in things, and huge profits in the years the investments paid off. This might result in more or less tax revenue depending on exactly how the rest of the tax code is structured (or restructured).
- twicetwice 4y ago
  Which would mean that only people/companies who can afford to weather huge losses (potentially for several consecutive years) are able to enter capital-intensive sectors, providing massive moats to incumbents in those sectors and even more advantages to people who are already wealthy.
  - ElevenLathe 4y ago
    Right, but isn't this good when we are talking about fossil fuel companies? Fair competition drives down the price of fossil energy, while our goal as a civilization should be to raise the price as much as we can stand (to infinity if possible!) so that we don't cook ourselves. You can therefore make the argument (though I don't agree with it myself) that subsidies to big oil that reduce competition from upstarts is, in a twisted way, a climate-positive policy. This of course fails because subsidizing big, publicly-traded oil companies reduces their cost of capital. This causes rational capital allocators to rationally invest in fossil fuel exploration, resulting in more carbon being dug out of the ground and added to the atmosphere.
  - vineyardmike 4y ago
    Or companies with venture capital? Something that seems easy if you’re literally pumping oil.
- deleted 4y ago
  [deleted]