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Or start to remove the subsidies that are keeping the prices low?
Yeah, then we can start buying the cheaper foreign oil instead instead of supporting the millions of domestic workers. But we'll tax the foreign oil so it's not cheaper... driving up the costs of nearly all goods in the process, pushing inflation even higher. Hmm... maybe it requires some thought beyond slogans, eh?
 

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I remember always being worried about regulations and price increases when I was addicted to tobacco.

After I quit smoking, I could give a horse’s pitooty about any of it. I now agree that increasing the price is a good motivator to get people to decide to quit.

Now that I don’t need gasoline for anything but a 20 year-old lawnmower. I hope they raise the price to $10/gallon LOL, in fact I would vote for it given the chance just to piss off the people who want to use it forever.


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Yeah, then we can start buying the cheaper foreign oil instead instead of supporting the millions of domestic workers. But we'll tax the foreign oil so it's not cheaper... driving up the costs of nearly all goods in the process, pushing inflation even higher. Hmm... maybe it requires some thought beyond slogans, eh?
A bit triggered there?? ;-)

I never said we should or shouldn't...
Just that it would raise gas prices...
 

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Tell me, what are those subsidies people talk so much about?
You're a smart guy. I think you know about them. So, interesting you would ask.. ;-)
Here's some info:
The vast majority of what people say are subsidies are the same subsidies all businesses get when they reinvest their income into purchasing assets to expand services and operations. If a bakery purchases a new oven so they can bake more bread, that money doesn't get taxed. We don't normally consider that Big Bakery subsidies though.
Haven't talked to the vast majority of people myself.
I wasn't saying it was bad or good, just that if affects gas prices...
Now, what is this about Bakery subsidies?????? ;-)
 

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A bit triggered there?? ;-)
Well, you put a winky, so I won't take that too seriously.

I never said we should or shouldn't...
Sounded like it:
Or start to remove the subsidies that are keeping the prices low?
But I suppose it could be read as just saying removing subsidies is somewhat equivalent to raising taxes. Okay.

My point was mostly that taking quick one-sentence "feel-good" statements without even slightly considering the full effects and potential unwanted consequences has become commonplace and that we should think a little deeper about these things. As it is, the lessening reliance on fossil fuels is going to have some profound effects on many industries and individuals. Not to say that we should just try to maintain the status-quo, just that we should consider the various intentional and unintentional effects.
 

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But I suppose it could be read as just saying removing subsidies is somewhat equivalent to raising taxes.
Yep, I was just answering the question about possibly raising gas prices and that wa the first thing that popped into my head.
I agree, it is a very involved issue that I absolutely don't know enough about to be able to speak on the pros and cons...
Lots of moving parts...
I admit I doubt it is on par with bakery subsidies, as was mentioned... ;-) But I also realize that a lot of businesses do get subsidies, and that in and of itself isn't a bad thing...
Lots of variables there... And I am bad enough with my own finances; no way I am qualified to talk on national/international finances... ;-)
 

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You're a smart guy. I think you know about them. So, interesting you would ask.. ;-)
Here's some info:
Did you read through that link? Here's what it considers "direct subsidies"
  • Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active). This provision allows companies to deduct a majority of the costs incurred from drilling new wells domestically.
This is a normal tax deduction for costs incurred doing business.
  • Percentage Depletion (26 U.S. Code § 613. Active). Depletion is an accounting method that works much like depreciation, allowing businesses to deduct a certain amount from their taxable income as a reflection of declining production from a reserve over time.
This is no less fair than credits for depreciating assets. Maybe eliminate depreciation as a tax deduction then.
  • Credit for Clean Coal Investment Internal Revenue Code § 48A (Active) and 48B (Inactive). These subsidies create a series of tax credits for energy investments, particularly for coal. In 2005, Congress authorized $1.5 billion in credits for integrated gasification combined cycle properties, with $800 million of this amount reserved specifically for coal projects. In 2008, additional incentives for carbon sequestration were added to IRC § 48B and 48A. These included 30 percent investment credits, which were made available for gasification projects that sequester 75 percent of carbon emissions, as well as advanced coal projects that sequester 65 percent of carbon emissions. Eliminating credits for investment in these projects would save $1 billion between 2017 and 2026.
This is a subsidy to cover the cost of making lower CO2 emitting fossil fueled power. Perhaps the 1 thing closest to resembling an actual direct subsidy that other businesses aren't entitled to.

"Indirect Subsidies"

  • Foreign Tax Credit (26 U.S. Code § 901. Active). Typically, when firms operating in foreign countries pay royalties abroad they can deduct these expenses from their taxable income. Instead of claiming royalty payments as deductions, oil and gas companies are able to treat them as fully deductible foreign income tax. In 2016, the JCT estimated that closing this loophole for all American businesses operating in countries that do not tax corporate income would generate $12.7 billion in tax revenue over the course of the following decade.
They aren't double-taxed, similar to other laws such as federal income tax code that allows local taxes to be deducted from taxable income.
  • Last In, First Out Accounting (26 U.S. Code § 472. Active). The Last In, First Out accounting method (LIFO) allows oil and gas companies to sell the fuel most recently added to their reserves first, as opposed to selling older reserves first under the traditional First In, First Out (FIFO) method. This allows the most expensive reserves to be sold first, reducing the value of their inventory for taxation purposes.
So they get to defer paying taxes, but only by the amount of their reserves. Eventually they will have to pay.
  • Master Limited Partnerships (Internal Revenue Code § 7704. Indirect. Active). Many oil and gas companies are structured as Master Limited Partnerships (MLPs). This structure combines the investment advantages of publicly traded corporations with the tax benefits of partnerships. While shareholders still pay personal income tax, the MLP itself is exempt from corporate income taxes. More than three-quarters of MLPs are fossil fuel companies. This provision is not available to renewable energy companies.
Not really sure how that avoids paying more taxes, as it sounds like they still get collected, just at the personal level rather than corporate. Personal taxes are generally higher than corporate, and for good reason.

There's a few subsidies that are no longer applicable because they have sunset or been repealed that are mentioned on that page. No reason to mention subsidies that aren't currently in play.

All of that is besides the point, because as I said, corporations don't pay taxes, consumers do. When taxes go up on something, that cost is paid by the consumer because corporations only have money from sales to their consumers.

 

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Did you read through that link?
Not really.
You said you weren't aware, so I just did some googling to help you out...
Again, I wasn't saying they are good or bad subsidies. Just that they exist...
And you still haven't told me more about the evil Bakery subsidies!!!
 

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Not really.
You said you weren't aware, so I just did some googling to help you out...
Again, I wasn't saying they are good or bad subsidies. Just that they exist...
And you still haven't told me more about the evil Bakery subsidies!!!
I consider tax code to be rife with corruption, with every little interest getting this or that deduction. It needs to be massively simplified. The common person should be able to "do their taxes" in like 5 minutes. Eliminate most every deduction.

I owned property in Oklahoma, so I know about depreciating structures and deducting expenses related to maintenance of the property. On paper, we took a loss every year. In reality, property appreciates and equity builds. The whole thing is a waste of time. I shouldn't be taxed for owning the property because it's a waste of time for everyone. Instead I should set the rental price to cover my expenses plus a tiny profit. That profit gets taxed in my personal income. Easy peasy.
 

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Discussion Starter · #310 ·
Naive people are happy in their fantasy land where they are uniquely saintly while evil oil tricks unsuspecting victims into consuming their products.
That's true, but as you said, "absolutely everything in our modern life depends on [fossil fuels]"

So while none of us are saints, individuals aren't to blame either. We can place blame on corrupt business and governments. Unfortunately, we need help from both to fix the problem.
 

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Discussion Starter · #311 ·
I think you agree, it is absurd that there would be a "clean coal" tax credit since there is no such thing as clean coal.

All of that is besides the point, because as I said, corporations don't pay taxes, consumers do. When taxes go up on something, that cost is paid by the consumer because corporations only have money from sales to their consumers.
Now where we disagree.

The idea that "corporations don't pay taxes" is mostly a fiction. When taxes go up on a corporation, that cost is not simply paid by the consumer. Usually, it eats into profits, which is the same as what happens in personal income taxes. There is only a partial relationship between corporate taxes and retail prices. Retail prices depend on many, many factors and corporate tax is only one of those factors.
 

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It's not quite so simple in the case of fossil fuels though, because absolutely everything in our modern life depends on them.

Raising fossil fuel taxes is something that would need to be done extremely delicately over a period of time to minimize the pain [profits] felt across all industries and by consumers.
You probably don't remember the term 'Windfall Profits' in regards to the petro biz from years ago.

Tax and spend, baby!
But not so much on the military. We already have ~600 military bases around the world. Why?
Some of it is to make the Saudis happy with their safe Gulf for the tankers....
Is that one of the 'subsidies' the petro biz gets?

"absolutely everything in our modern life depends on them."
Or does it depend on the energy to produce most things?
Now if there were only a clean way to produce the energy needed..
 

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(large chart showing $139 per MW solar subsidies)
I don't know where that chart comes from (source?) but I have never seen subsidy numbers that high for solar and so low for fossil fuels.

Here's a chart from the respected independent industry analyst Lazard showing the Levelized Cost of Energy (LCOE), which is the cost of producing power by source without subsidies. Cost includes up-front capital to build the plant, depreciation, interest, fuel and maintenance.

Bottom line: the cheapest form of energy produced today are wind and utility-scale solar compared to fossil fuels when they go head-to-head without subsidies.
(the gold color numbers $28-$41 for gas, coal and nuke are marginal operating cost without capital and depreciation)

Solar and wind enjoy an inherent advantage: the cost of "fuel" is free. Natural gas, coal and nuclear require the purchase and delivery of fuel to the plant.

There is no question in my mind that ultimately the combination of EV's with solar and wind generation will prevail in the marketplace as the most cost-effective form of surface transportation.

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source: Levelized Cost of Energy and of Storage
 

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Since most everyone here is having a rhubarb, I'll join in -
... I never said GM will go out of existence...
Let me refer to the title: "Is this the end of GM?"


Btw, I'm also concerned about that impending bakery tax :cry:
 

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I don't know where that chart comes from (source?) but I have never seen subsidy numbers that high for solar and so low for fossil fuels.

Here's a chart from the respected independent industry analyst Lazard showing the Levelized Cost of Energy (LCOE), which is the cost of producing power by source without subsidies. Cost includes up-front capital to build the plant, depreciation, interest, fuel and maintenance.

Bottom line: the cheapest form of energy produced today are wind and utility-scale solar compared to fossil fuels when they go head-to-head without subsidies.
(the gold color numbers $28-$41 for gas, coal and nuke are marginal operating cost without capital and depreciation)

Solar and wind enjoy an inherent advantage: the cost of "fuel" is free. Natural gas, coal and nuclear require the purchase and delivery of fuel to the plant.

There is no question in my mind that ultimately the combination of EV's with solar and wind generation will prevail in the marketplace as the most cost-effective form of surface transportation.
I'm excited by the prospect of EVs playing a large role in partially solving the achilles heel of renewables; that they are non-dispatchable. Generating electricity is the easy part, but delivering precisely the right amount to each and every home based on varying demand in fractions of a second is the tricky part. Renewables today are not considered alternatives because they aren't dispatchable (follows demand) and not steady output (like nuclear).

Based on no math at all and just a hunch, I think the most realistic solution in the future would involve nuclear providing baseload electricity, with renewables supplying the rest, and EVs and other storage mechanisms providing the storage capacity.

The Bolt, with it's 60 kWh capacity could run my home for about 3 days. That's quite a bit of storage capacity.
 

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The writing on the wall for the push for EV s in 2030 will be big oil and taxing entities. With the decline of oil fuel you will see the cost rise. Supply and demand will be manipulated. Half the production will still cost the same to consumers. YOU WILL BE PAYING 8.00 A GALLON.
Prices go up when demand exceeds supply.

Prices go down when supply exceeds demand.

As long as the Middle East has ridiculously low production costs, the price of oil will fall as demand falls and producers scramble to find buyers.

The only way that oil prices will rise is through government regulations, such as carbon taxes, designed to include the external cost of burning fossil fuels.
 

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Or Cartel (OPEC) behavior. Luckily that drove outside competition so we have more market forces in play today.
I think this is way more complicated than that, simplified, I think OPEC was getting into spats with Russia and others and these fights helped make the US system emerge as profitable producers at very high prices. This in turn lowered the volume of oil being exported from OPEC countries and hurt smaller producers. To mitigate this effect OPEC decided to let the US be the "swing-state" for stability in volume coming from producers.

At any point OPEC could start controlling prices upwards again, but they'd have to be willing to step in and make accomodations for smaller producers.
 
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