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An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

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Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

#11

Post by lordnacho »

gruez wrote: post #9
maxbond wrote: post #4

Earlier quoted context omitted.

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.

>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 th…

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?

Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

#13

Post by dundarious »

mox1 wrote: post #5

Part of the 'avoiding taxes' equation here was giving the government (or setting aside) ~$600 million dollars to pay for oil spill related problems. So I mean she did avoid paying income tax, but only by giving up $600 million dollars to the government (which flowed back to her personal taxes to offset any income).

Part of the 'giving up $600 million dollars' equation here was creating an environmental disaster.

I don't understand the relevance of your point.

Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

#14

Post by rhino369 »

maxbond wrote: post #4
RicoElectrico wrote: post #2

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…

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.

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.

Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

#15

Post by skywal_l »

dundarious wrote: post #13
mox1 wrote: post #5

Part of the 'avoiding taxes' equation here was giving the government (or setting aside) ~$600 million dollars to pay for oil spill related problems. So I mean she did avoid paying income tax, but only by giving up $600 million dollars to the government (which flowed back to her personal taxes to offset any income).

Part of the 'giving up $600 million dollars' equation here was creating an environmental disaster. I don't understand the relevance of your point.

His point is that fines are tax deductible. It's logical from an accountant point of view, but indeed absurd from a human point of view.

Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

#16

Post by db48x »

dundarious wrote: post #13
mox1 wrote: post #5

Part of the 'avoiding taxes' equation here was giving the government (or setting aside) ~$600 million dollars to pay for oil spill related problems. So I mean she did avoid paying income tax, but only by giving up $600 million dollars to the government (which flowed back to her personal taxes to offset any income).

Part of the 'giving up $600 million dollars' equation here was creating an environmental disaster. I don't understand the relevance of your point.

You can frequently avoid paying taxes, but only at the cost of paying more money than your taxes would have been. It is usually preferable to pay the taxes instead.

Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

#17

Post by LamdbaMamba »

skywal_l wrote: post #15
dundarious wrote: post #13

Earlier quoted context omitted.

Part of the 'giving up $600 million dollars' equation here was creating an environmental disaster. I don't understand the relevance of your point.

His point is that fines are tax deductible. It's logical from an accountant point of view, but indeed absurd from a human point of view.

Is it absurd from a human point of view? 'Tax deductible' means lowering your taxable income because you incurred certain expenses. It's not just a free tax write off.

Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

#19

Post by woodruffw »

LamdbaMamba wrote: post #17
skywal_l wrote: post #15

Earlier quoted context omitted.

His point is that fines are tax deductible. It's logical from an accountant point of view, but indeed absurd from a human point of view.

Is it absurd from a human point of view? 'Tax deductible' means lowering your taxable income because you incurred certain expenses. It's not just a free tax write off.

The absurdity is in its dampening of the (ostensible) punishment: you shouldn't be rewarded with a tax deduction for performing an incredible amount of pollution. Instead, you should be both fined and taxed.

Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years

#20

Post by ChrisLomont »

titusjohnson wrote: post #6
RicoElectrico wrote: post #2

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…

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 the…

> 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...

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