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That is technically true, but why is no one asking how and why his electricity bill is $223 at minimum, plied higher since the bill was only reduced by that amo

That is technically true, but why is no one asking how and why his electricity bill is $223 at minimum, plied higher since the bill was only reduced by that amount. Also, “subsidies” are really just a quaint term for “made the working and lower middle class that can’t pay for such exorbitant luxuries pay for it through taxes and inflation”. I’m always a bit confused if seemingly otherwise smart people simply don’t understand something so basic, or if they simply just ignore and don’t want to acknowledge it as if that changes the fact. Guess who else gets subsidies; someone who buys goods out of the truck of a car … wow, such a great deal. Would anyone like to subsidize my next restaurant visit by paying for my entree? No? But making someone unknown working class person pay for my $25,000 solar install through inflation is ok? How about we all just pay for the things we want I stead of making others pay for it? It’s immoral and evil, whether you call it subsidies or something else.

throwaway6734 4y ago
Subsidies exist for many industries
arrosenberg 4y ago
> Would anyone like to subsidize my next restaurant visit by paying for my entree? No? But making someone unknown working class person pay for my $25,000 solar install through inflation is ok? Yes, it obviously is ok? Your next restaurant meal doesn't have a broad impact on the world we live in, whereas the deployment of solar panels does.
- unixlikeposting 4y ago
  maybe that poster is a vegan locavore
kube-system 4y ago
Your restaurant visit is quite subsidized. Notably, both the labor and the materials used are heavily subsidized.
malfist 4y ago
Perhaps instead of being angry that people are using taxes that come from the working class, instead you should ask why the wealthy aren't paying their share of the taxes? And nobody pays for anything with inflation. That's not how inflation works.
- prottog 4y ago
  > instead you should ask why the wealthy aren't paying their share of the taxes? And what is the right share that the wealthy should pay, and how wealthy should one be to be paying that amount? I'm assuming it's some level of wealth above yours. About half of the US doesn't pay any federal income tax, and a little over a quarter pays no net federal taxes at all, including payroll taxes. The labor force participation rate hit its peak in the 90s and has been steadily decreasing since then, with the last reading at 62.1%. Perhaps you should ask why two-fifths of adults aren't doing their share of the labor?
  - malfist 4y ago
    > Perhaps you should ask why two-fifths of adults aren't doing their share of the labor? Careful that you don't cut yourself with all those edgy takes.
    - prottog 4y ago
      I say this without any snark or sarcasm: I welcome your analysis on the matter, if you have thoughts to add. It's inconceivable to me where this belief comes from, that everything will be so much better if only the wealthy paid their "fair share" of taxes. Otherwise, I ask that you keep empty comments out of the forum.
- claytongulick 4y ago
  "The top 1 percent paid a greater share of individual income taxes (38.8 percent) than the bottom 90 percent combined (29.2 percent)."[1] How is that not paying their share? [1] https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income...
pkulak 4y ago
Unless you walk to that restaurant, it will absolutely be subsidized. 6 percent of all state and local spending is on roads. And that's not counting any negative externalities, which subsidies should be reducing (like, for example, a solar installation subsidy), not increasing.
- thfuran 4y ago
  There are a lot of subsidies in agriculture as well.
wittycardio 4y ago
You are incredibly ignorant about how the world works.
RC_ITR 4y ago
>Would anyone like to subsidize my next restaurant visit by paying for my entree? No? But making someone unknown working class person pay for my $25,000 solar install through inflation is ok? It's amazing how ignorant people can be to the world around them. Let's assume you live in the US, since the article is dealing with those subsidies. The food you're eating - c. 20% of US farm income is subsidies [0] The employees of the restaurant - probably, at least one of them is on a government support program to augment their wages [1] The car you drove to the restaurant in - the US Federal government subsidized your gas (ever wonder why US gas is cheaper than Canada/EU?) [2] So maybe instead of spending your time looking down your nose and 'not understanding why people don't understand economics,' why don't you do research on the world around you? [0] https://perc.tamu.edu/PERC-Blog/PERC-Blog/U-S-Farm-Subsidies-A-Prime-Example-of-Crony-Capita https://perc.tamu.edu/PERC-Blog/PERC-Blog/U-S-Farm-Subsidies... [1] https://www.gao.gov/products/gao-21-45 https://www.gao.gov/products/gao-21-45 [2] https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subs...
- TMWNN 4y ago
  >The car you drove to the restaurant in - the US Federal government subsidized your gas (ever wonder why US gas is cheaper than Canada/EU?) US gas is cheaper than elsewhere in the developed world because a) the US is self-sufficient in terms of supply and, more importantly, b) US fuel taxes are less. If you actually read the EESI paper you cited, you see that the "subsidies", whether direct or indirect, are actually varying accounting treatments; basically, the same amount of taxes are collected but over a longer period of time. In any case, even if you were to remove all the direct "subsidies", the paper does not claim that tax revenue would rise more than about $40 billion over about a decade. $4 billion a year is a pittance for a federal government that collected $4.9 trillion in 2022.
  - RC_ITR 4y ago
    Oh fun! I love when people Dunning-Kruger themselves on accounting (I literally just sat up straight in my chair!) Let's go through your argument (would you believe I did both read and understand the document I linked!?), but before we do that, let's look at some more traditional subsidies that O&G gets in America: [0] The GAO has reported extensively that taxpayers have not received a fair rate of return due to outdated fiscal terms. For example, Federal onshore oil and gas royalty rates are consistently lower than on State-issued leases and Federal offshore leases (see Tables 1 and 2); in fact, onshore royalty rates have never been raised. Likewise, bonding levels have not been raised for 60 years, and minimum bids and rents have been the same for over 30 years. If a lease is not sold competitively at auction, for two years it can be sold non-competitively for a modest administrative fee, with no bonus bid required. These noncompetitive leases are frequently less diligently developed as competitively issued leases. From 2013 to 2019, average revenues from competitive leases were nearly three times greater than revenues from noncompetitive leases. Underpriced use of public land sure sounds like a subsidy to me! Ok back to your comment, let's cherry-pick some arguments you made then get into accounting. >US gas is cheaper than elsewhere in the developed world because a) the US is self-sufficient in terms of supply Oh, I was unaware that the cheap gas phenomenon started in 2008 when we started approaching energy independence. Thanks Obama, I guess. >b) US fuel taxes are less. You're getting dangerously close to agreeing with me on the subsidy point, but I know we won't agree on the politics of pricing externalities, so I'll just move on. > the paper does not claim that tax revenue would rise more than about $40 billion over about a decade. $4 billion a year is a pittance for a federal government that collected $4.9 trillion in 2022. It's an amazing logical fallacy to say "one number is smaller than another unrelated number, so the smaller number is unimportant," but even ignoring that, its still a subsidy and that's my entire point. Subsidies big and small are everywhere and this is one of them. I nowhere made an argument that O&G subsidies are going to bankrupt the US, just wanted to make OP aware of the fact that their gas is subsidized. OK, now on to my favorite topic: why GAAP and cashflow accounting are different and why that actually matters, especially in CAPEX-driven balance sheet businesses. 1) The Intangible Drilling Costs Deduction - You are 100% wrong here. Depreciation and Amortization schedules exist for a reason, it's not just made up to keep EY busy footing 3-statement models. Let's run with this hypothetical: a business looks to build a well when prices are $100/barrel. In that first year of pumping, they successfully discover that the well is wet and they pay way less tax than they otherwise would because they got to amortize everything all at once. Now in year 2, that wet well is still producing but oil prices fall and it no longer makes sense to keep pumping. So now they have a known wet well (a balance sheet asset that they can restart at any time) and all the retained earnings from year 1 that the government never gets to claw back. Compare this to a world without this subsidy where those expenses are amortized on expected useful life of the well. In this case, not only does the driller have incentive to keep producing even if prices fall, they absorb some of the pricing risk that the US government currently takes on. If the US government intentionally absorbing pricing risk (arguably free insurance for O&G companies) is not a subsidy to you then again, we just disagree. 2) Percentage Depletion - In contrast, percentage depletion allows firms to deduct a set percentage from their taxable income. Because percentage depletion is not based on capital costs, total deductions can exceed capital costs. << Enough said 3) Foreign tax - Instead of claiming royalty payments as deductions, oil and gas companies are able to treat them as fully deductible foreign income tax. << Again, maybe you're not following the language here, but this is not "basically, the same amount of taxes are collected but over a longer period of time" it's "less taxes vs. other industries" (if you actually don't follow, tax paid to foreign governments isn't treated as a normal expense, it's usually covered in treaty agreements and is treated as tax already paid) So yeah, not only are these real honest to goodness subsidies, they amount to billions of dollars a year! [0]https://www.doi.gov/sites/doi.gov/files/report-on-the-federal-oil-and-gas-leasing-program-doi-eo-14008.pdf https://www.doi.gov/sites/doi.gov/files/report-on-the-federa...
zopa 4y ago
> I’m always a bit confused if seemingly otherwise smart people simply don’t understand something so basic Are you surprised, truly? All right, I’ll play along. We have a progressive tax system. So the majority of the costs are born by the wealthy and the well-off, rather than the working class. Some of the well-to-do got that way by grit and hard work; others by luck; and at least a few by fraud and worse. They’re the winners of a somewhat-arbitrary game, and I don’t see anything wrong with tweaking the rules in pursuit of a collective good, like wider solar panel deployment. Meanwhile! We know that most industries have quite dramatic learning-by-doing and returns to scale. And yet in this fallen world transaction costs and imperfect information can prevent new technologies from getting enough scale practice to become economically viable. So temporary subsidies in the early stage have a good chance of bringing costs down for everyone. I’m very glad to be the first to introduce you to these arguments, if I am. You don’t have to agree: I left my mind-control goggles in my other coat. But please, don’t play dumb.
- kube-system 4y ago
  Sort of. The literal tax bracket for earned income is progressive. But due to lower tax rates for certain other types of income, and the ability for the ultra rich to utilize the tax code to the fullest, the net effect is that the actual overall tax rates are progressive at the bottom end, and regressive at the top end.

throwaway6734 4y ago

Subsidies exist for many industries

arrosenberg 4y ago

> Would anyone like to subsidize my next restaurant visit by paying for my entree? No? But making someone unknown working class person pay for my $25,000 solar install through inflation is ok? Yes, it obviously is ok? Your next restaurant meal doesn't have a broad impact on the world we live in, whereas the deployment of solar panels does.

unixlikeposting 4y ago
maybe that poster is a vegan locavore

kube-system 4y ago

Your restaurant visit is quite subsidized. Notably, both the labor and the materials used are heavily subsidized.

malfist 4y ago

Perhaps instead of being angry that people are using taxes that come from the working class, instead you should ask why the wealthy aren't paying their share of the taxes? And nobody pays for anything with inflation. That's not how inflation works.

prottog 4y ago
> instead you should ask why the wealthy aren't paying their share of the taxes? And what is the right share that the wealthy should pay, and how wealthy should one be to be paying that amount? I'm assuming it's some level of wealth above yours. About half of the US doesn't pay any federal income tax, and a little over a quarter pays no net federal taxes at all, including payroll taxes. The labor force participation rate hit its peak in the 90s and has been steadily decreasing since then, with the last reading at 62.1%. Perhaps you should ask why two-fifths of adults aren't doing their share of the labor?
- malfist 4y ago
  > Perhaps you should ask why two-fifths of adults aren't doing their share of the labor? Careful that you don't cut yourself with all those edgy takes.
  - prottog 4y ago
    I say this without any snark or sarcasm: I welcome your analysis on the matter, if you have thoughts to add. It's inconceivable to me where this belief comes from, that everything will be so much better if only the wealthy paid their "fair share" of taxes. Otherwise, I ask that you keep empty comments out of the forum.
claytongulick 4y ago
"The top 1 percent paid a greater share of individual income taxes (38.8 percent) than the bottom 90 percent combined (29.2 percent)."[1] How is that not paying their share? [1] https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income...

pkulak 4y ago

Unless you walk to that restaurant, it will absolutely be subsidized. 6 percent of all state and local spending is on roads. And that's not counting any negative externalities, which subsidies should be reducing (like, for example, a solar installation subsidy), not increasing.

thfuran 4y ago
There are a lot of subsidies in agriculture as well.

wittycardio 4y ago

You are incredibly ignorant about how the world works.

RC_ITR 4y ago

>Would anyone like to subsidize my next restaurant visit by paying for my entree? No? But making someone unknown working class person pay for my $25,000 solar install through inflation is ok? It's amazing how ignorant people can be to the world around them. Let's assume you live in the US, since the article is dealing with those subsidies. The food you're eating - c. 20% of US farm income is subsidies [0] The employees of the restaurant - probably, at least one of them is on a government support program to augment their wages [1] The car you drove to the restaurant in - the US Federal government subsidized your gas (ever wonder why US gas is cheaper than Canada/EU?) [2] So maybe instead of spending your time looking down your nose and 'not understanding why people don't understand economics,' why don't you do research on the world around you? [0] https://perc.tamu.edu/PERC-Blog/PERC-Blog/U-S-Farm-Subsidies-A-Prime-Example-of-Crony-Capita https://perc.tamu.edu/PERC-Blog/PERC-Blog/U-S-Farm-Subsidies... [1] https://www.gao.gov/products/gao-21-45 https://www.gao.gov/products/gao-21-45 [2] https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subs...

TMWNN 4y ago
>The car you drove to the restaurant in - the US Federal government subsidized your gas (ever wonder why US gas is cheaper than Canada/EU?) US gas is cheaper than elsewhere in the developed world because a) the US is self-sufficient in terms of supply and, more importantly, b) US fuel taxes are less. If you actually read the EESI paper you cited, you see that the "subsidies", whether direct or indirect, are actually varying accounting treatments; basically, the same amount of taxes are collected but over a longer period of time. In any case, even if you were to remove all the direct "subsidies", the paper does not claim that tax revenue would rise more than about $40 billion over about a decade. $4 billion a year is a pittance for a federal government that collected $4.9 trillion in 2022.
- RC_ITR 4y ago
  Oh fun! I love when people Dunning-Kruger themselves on accounting (I literally just sat up straight in my chair!) Let's go through your argument (would you believe I did both read and understand the document I linked!?), but before we do that, let's look at some more traditional subsidies that O&G gets in America: [0] The GAO has reported extensively that taxpayers have not received a fair rate of return due to outdated fiscal terms. For example, Federal onshore oil and gas royalty rates are consistently lower than on State-issued leases and Federal offshore leases (see Tables 1 and 2); in fact, onshore royalty rates have never been raised. Likewise, bonding levels have not been raised for 60 years, and minimum bids and rents have been the same for over 30 years. If a lease is not sold competitively at auction, for two years it can be sold non-competitively for a modest administrative fee, with no bonus bid required. These noncompetitive leases are frequently less diligently developed as competitively issued leases. From 2013 to 2019, average revenues from competitive leases were nearly three times greater than revenues from noncompetitive leases. Underpriced use of public land sure sounds like a subsidy to me! Ok back to your comment, let's cherry-pick some arguments you made then get into accounting. >US gas is cheaper than elsewhere in the developed world because a) the US is self-sufficient in terms of supply Oh, I was unaware that the cheap gas phenomenon started in 2008 when we started approaching energy independence. Thanks Obama, I guess. >b) US fuel taxes are less. You're getting dangerously close to agreeing with me on the subsidy point, but I know we won't agree on the politics of pricing externalities, so I'll just move on. > the paper does not claim that tax revenue would rise more than about $40 billion over about a decade. $4 billion a year is a pittance for a federal government that collected $4.9 trillion in 2022. It's an amazing logical fallacy to say "one number is smaller than another unrelated number, so the smaller number is unimportant," but even ignoring that, its still a subsidy and that's my entire point. Subsidies big and small are everywhere and this is one of them. I nowhere made an argument that O&G subsidies are going to bankrupt the US, just wanted to make OP aware of the fact that their gas is subsidized. OK, now on to my favorite topic: why GAAP and cashflow accounting are different and why that actually matters, especially in CAPEX-driven balance sheet businesses. 1) The Intangible Drilling Costs Deduction - You are 100% wrong here. Depreciation and Amortization schedules exist for a reason, it's not just made up to keep EY busy footing 3-statement models. Let's run with this hypothetical: a business looks to build a well when prices are $100/barrel. In that first year of pumping, they successfully discover that the well is wet and they pay way less tax than they otherwise would because they got to amortize everything all at once. Now in year 2, that wet well is still producing but oil prices fall and it no longer makes sense to keep pumping. So now they have a known wet well (a balance sheet asset that they can restart at any time) and all the retained earnings from year 1 that the government never gets to claw back. Compare this to a world without this subsidy where those expenses are amortized on expected useful life of the well. In this case, not only does the driller have incentive to keep producing even if prices fall, they absorb some of the pricing risk that the US government currently takes on. If the US government intentionally absorbing pricing risk (arguably free insurance for O&G companies) is not a subsidy to you then again, we just disagree. 2) Percentage Depletion - In contrast, percentage depletion allows firms to deduct a set percentage from their taxable income. Because percentage depletion is not based on capital costs, total deductions can exceed capital costs. << Enough said 3) Foreign tax - Instead of claiming royalty payments as deductions, oil and gas companies are able to treat them as fully deductible foreign income tax. << Again, maybe you're not following the language here, but this is not "basically, the same amount of taxes are collected but over a longer period of time" it's "less taxes vs. other industries" (if you actually don't follow, tax paid to foreign governments isn't treated as a normal expense, it's usually covered in treaty agreements and is treated as tax already paid) So yeah, not only are these real honest to goodness subsidies, they amount to billions of dollars a year! [0]https://www.doi.gov/sites/doi.gov/files/report-on-the-federal-oil-and-gas-leasing-program-doi-eo-14008.pdf https://www.doi.gov/sites/doi.gov/files/report-on-the-federa...

zopa 4y ago

> I’m always a bit confused if seemingly otherwise smart people simply don’t understand something so basic Are you surprised, truly? All right, I’ll play along. We have a progressive tax system. So the majority of the costs are born by the wealthy and the well-off, rather than the working class. Some of the well-to-do got that way by grit and hard work; others by luck; and at least a few by fraud and worse. They’re the winners of a somewhat-arbitrary game, and I don’t see anything wrong with tweaking the rules in pursuit of a collective good, like wider solar panel deployment. Meanwhile! We know that most industries have quite dramatic learning-by-doing and returns to scale. And yet in this fallen world transaction costs and imperfect information can prevent new technologies from getting enough scale practice to become economically viable. So temporary subsidies in the early stage have a good chance of bringing costs down for everyone. I’m very glad to be the first to introduce you to these arguments, if I am. You don’t have to agree: I left my mind-control goggles in my other coat. But please, don’t play dumb.

kube-system 4y ago
Sort of. The literal tax bracket for earned income is progressive. But due to lower tax rates for certain other types of income, and the ability for the ultra rich to utilize the tax code to the fullest, the net effect is that the actual overall tax rates are progressive at the bottom end, and regressive at the top end.