This is a PR piece for politicians, yellow-journalism for uneducated people. Lots of adjacent color cultivating reader biases and eliding basic economics and accounting. But thumbs up, great journalism! Reminds me of how the same US pols that fundamentally drive infrastructure policy with the tax code chided companies for “not paying taxes” based on the very incentives they had designed.
An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
21–30 of 59 posts
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#22Earlier quoted context omitted.
There’s nothing wrong with write offs, about half of my income is paid to the government. I will always do everything I can to minimize my tax liability, and it’s natural to do so.
Does this include fighting to keep an oil well leaking?
The climate comments here are virtue signaling. Like it or not it was completely legal.
There is a price for everything, including human lives. Lose a limb? Eye? There’s a price for it all, even a oil spill.
Whether it’s enough is an entirely different conversation.
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#23Earlier 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.
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.
I think everyone, including the writer of the article, understands the mechanism at play. The point is that you can't justify something by just stating the mechanism. The article already states very clearly what is going on.
> That’s in significant measure because she was able to transform money her company was compelled to spend cleaning up the oil spill into a perfectly legal nine-figure tax write-off for herself.
OP's post was essentially a re-wording of this quotation, and as such, doesn't make a case beyond I guess an implied "that's legal so it's good, or at least just the way it has to work".
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#24This is a PR piece for politicians, yellow-journalism for uneducated people. Lots of adjacent color cultivating reader biases and eliding basic economics and accounting. But thumbs up, great journalism! Reminds me of how the same US pols that fundamentally drive infrastructure policy with the tax code chided companies for “not paying taxes” based on the very incentives they had designed.
Can you enumerate some of the accounting issues?
Also, “they” is not accurate. I suspect you already realize that lawmakers and the population governed by their laws have very different incentives and outcomes.
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#25Earlier 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.
It's definitely absurd that you lower your tax basis (i.e. the gains/income-based maintenance obligation we all have to keep the country running) because you paid a fine to offset an externality (which is a cost above, beyond, and unrelated to the maintenance cost of the country).
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#26Earlier 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.
Yes it is absurd because destroying the environment should not be considered a business expense.
When a cab is fined for speeding, he cannot claim it as a business expense. He put lives at risk and that is not a reasonable business decision. It should be the same for oil spills.
But guess what, tax codes are not written by taxi drivers...
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#27So 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…
Treating a valuation as if it was actual income is highly misleading.
If you inherit something without paying a tax in the gain in value, fine. But being able to declare your basis in it at the newly gained value allow taxes on its eventual sale to skip a massive gain in value. That is the sketchiest aspect IMHO.
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#28Earlier 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.
It's absurd that a fine reduces your taxable income. It has very little impact on low-income people, but quite a high one if you're rich.
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#29Earlier quoted context omitted.
Does this include fighting to keep an oil well leaking?
The climate comments here are virtue signaling. Like it or not it was completely legal. There is a price for everything, including human lives. Lose a limb? Eye? There’s a price for it all, even a oil spill. Whether it’s enough is an entirely different conversation.
> The climate comments here are virtue signaling.
What a convenient way to shut down a valid argument. The whole thrust is that the incentives are encouraging negative externalities by legalizing them and providing tax breaks for polluting. I don't like it, and it should be called out - more people need to be aware that these things keep happening because it's benefitting some rich knob.
Re: An Oil Spill Helped One Billionaire Avoid Paying Income Tax for 14 Years
#30This title is wildly misleading. The problem isn't the oil spill it's the treatment of step up basis on the death of her husband. That's where the real awfulness creeps in to this sequence of events.
You have a person with this basic trajectory:
Step 1 - Gets a $1 billion dollar asset, but claims it's worth $1.2 billion. No tax due, basis set at $1.2bn.
Step 2 - Sells asset for $1 billion, which is what it's worth. Says hey I just lost $200MM
Step 3 - Uses that loss to offset real gains from other businesses. Doesn't pay tax on anything at all
It's Step 1 that's the problem. For fucking insane reasons no tax at all is due at all in this step AND there's no unrealized capital gains transferred either, so the billion dollars of wealth created will never be taxed as having accrued to anyone ever AND there's an incentive to overvalue it since there's no tax due. In a normal world people don't pretend assets they get are worth more than the really are since that's a gain they'll have to pay taxes on.
This state of affairs is fundamentally indefensible. Even in our fucked up world of influence peddling I'm amazed the plutocrats were able to make this happen.