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From the OP, the list of “subsidies” is below. I’m not an expert but this sounds like lots more than amortization. Do these all sound like things that are reas

From the OP, the list of “subsidies” is below. I’m not an expert but this sounds like lots more than amortization. Do these all sound like things that are reasonable after digging more to you? (Tone check - not accusatory, I’m curious if this matches up with your previous research or doesn’t overlap). Tax credits and deductions on the face sound unreasonable to me, but it’s unclear from the summary how substantial they actually are. I’d agree that policing the Middle East is by far the biggest subsidy though, and that externalities are the thing we should be focusing on. But absent a coherent CO2 tax proposal I’m ok with chipping away at smaller subsidies where they exist (Though now seems to be a politically suicidal time to propose doing so. Wait until inflation is under control before increasing the cost of gas again.) >>> This bill limits or repeals certain fossil fuel oil and gas subsidies for oil companies. Specifically, it increases to seven years the amortization period for geological and geophysical expenditures; repeals the tax credits for producing oil and gas from marginal wells and for enhanced oil recovery; repeals the tax deduction for the intangible drilling and development costs of oil and gas wells; repeals percentage depletion; repeals the tax deduction for tertiary injectant expenses; repeals the passive loss exception for working interests in oil and gas property; denies the tax deduction for income attributable to domestic production activities for oil and gas activities; prohibits the use of the last-in, first-out (LIFO) accounting method by major integrated oil companies; limits the foreign tax credit for dual capacity taxpayers (i.e., taxpayers who are subject to a levy of a foreign country or U.S. possession and receive specific economic benefits from such country or possession); and expands the definition of crude oil for purposes of the excise tax on petroleum and petroleum products to include any oil derived from a bitumen or bituminous mixture (tar sands), and any oil derived from kerogen-bearing sources (oil shale).

megaman821 4y ago
I am no expert, but the only one the sticks out to me is the depletion allowance. If you sell a million barrels of oil you then get to say you land is worth a million barrels of oil less. What exactly is that supposed to be incentivizing? You have already taken the oil out of the ground and sold it. It is a pure gift to be able to write-off some of your land value after that.
- snapplebobapple 4y ago
  while writing it without having to sell it is a bit of a gift, it is still just an amortization thing because your land is materially worth less now that the oil isn't available to be extracted. If you sold the land you would have a loss equivalent to that change in value to write off against your other profits. It's once again just a timing thing not an actual net change as the loss will be recorded and deducted from taxes payable at some point with or without this legislation and it really should be.

megaman821 4y ago

I am no expert, but the only one the sticks out to me is the depletion allowance. If you sell a million barrels of oil you then get to say you land is worth a million barrels of oil less. What exactly is that supposed to be incentivizing? You have already taken the oil out of the ground and sold it. It is a pure gift to be able to write-off some of your land value after that.

snapplebobapple 4y ago
while writing it without having to sell it is a bit of a gift, it is still just an amortization thing because your land is materially worth less now that the oil isn't available to be extracted. If you sold the land you would have a loss equivalent to that change in value to write off against your other profits. It's once again just a timing thing not an actual net change as the loss will be recorded and deducted from taxes payable at some point with or without this legislation and it really should be.