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

propublica.org

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

#51

Post by hogFeast »

dundarious wrote: post #49
hogFeast wrote: post #47

Earlier quoted context omitted.

So you are saying that they attempted to write off taxes and also attempted to minimise the estimate...you should not go into finance my friend. And yes, your response is the kind of misconception that I think the journalists banked on.

I spent the last 10 years of my engineering career working at a well-known prop trading firm, on the low-level and algorithmic side. Stonewalling, fucking the dog (pretending to work, but really doing nothing), being sued into some kind of compliance, and having your counterparty forced to hire contractors to do the work you "promised ;)" to do is not merely an honest attempt to minimise costs.

You still don't understand the mistake you have made. Again, don't go into finance. You don't understand basic elements of what is going on here.

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

#52

Post by dundarious »

hogFeast wrote: post #51
dundarious wrote: post #49

Earlier quoted context omitted.

I spent the last 10 years of my engineering career working at a well-known prop trading firm, on the low-level and algorithmic side. Stonewalling, fucking the dog (pretending to work, but really doing nothing), being sued into some kind of compliance, and having your counterparty forced to hire contractors to do the work you "promised ;)" to do is not merely an honest attempt to minimise costs.

You still don't understand the mistake you have made. Again, don't go into finance. You don't understand basic elements of what is going on here.

Happy to have it explained to me beyond "you still don't understand", to be told how prop trading (market making and taking, hedging, theo generation, risk analysis, etc.) is not "finance", to read why I'm wrong despite the points I made about how the article has substantive complaints and wasn't merely a Trojan horse for a wealth tax.

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

#53

Post by dundarious »

vorpalhex wrote: post #50
dundarious wrote: post #45

Earlier quoted context omitted.

That is finally an actual argument. The problem with treating such environmental cleanup as just another cost, is that it's just another cost. It may be economical to just do the damage, or at least to cut corners such that there's an "unreasonable" risk of doing the damage. After the fact, you can always push for low-ball cost estimates, try to cap your max payout to that level, push back on actually doing the work…

All businesses that transport chemicals will have a spill. Until we transition entirely off of oil, oil spills are a part of life. We can reduce them, we can limit the damage but we can't prevent them. Yes, companies can be less than ideal at fixing spills. We have tools like auditors and other third parties as a control. Tax write offs are for anything that costs you money as a business. Your accountant needs a chai…

The tax code is absolutely used as an incentive and punishment structure to guide behavior. Things are made tax deductible or not all the time. We don't need to get into questions of morality. And there's no issue with enforcement here. You say it's not deductible and maybe you audit their books after a few years. If they tried to write it off, come down on them like a ton of bricks.

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

#54

Post by vanusa »

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).

Jeez, man -- you say "giving" here like it was a charitable contribution.

In reality it was a negotiated settlement to avoid (I am assuming) criminal penalties. The point of the article was that it was only because of a loophole in the tax code that she was able to pass this settlement (a huge fine, basically) as an operating "loss".

Think about that for a second. Suppose you misfile your taxes (intentionally or otherwise), and get hit with a $20k fine by the IRS. Do you get to write that $20k off as a "loss"? In exchange for "giving" that $20k to the government?

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

#55

Post by hogFeast »

dundarious wrote: post #52
hogFeast wrote: post #51

Earlier quoted context omitted.

You still don't understand the mistake you have made. Again, don't go into finance. You don't understand basic elements of what is going on here.

Happy to have it explained to me beyond "you still don't understand", to be told how prop trading (market making and taking, hedging, theo generation, risk analysis, etc.) is not "finance", to read why I'm wrong despite the points I made about how the article has substantive complaints and wasn't merely a Trojan horse for a wealth tax.

I explained it already. The reason why you don't think it has been explained is the same reason you don't understand. I said nothing about prop trading...but you don't are missing knowledge that you get taught first year in a finance course, and you were a engineer...as I said, I don't think you have any awareness about the limits of your knowledge.

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

#56

Post by vorpalhex »

dundarious wrote: post #53
vorpalhex wrote: post #50

Earlier quoted context omitted.

All businesses that transport chemicals will have a spill. Until we transition entirely off of oil, oil spills are a part of life. We can reduce them, we can limit the damage but we can't prevent them. Yes, companies can be less than ideal at fixing spills. We have tools like auditors and other third parties as a control. Tax write offs are for anything that costs you money as a business. Your accountant needs a chai…

The tax code is absolutely used as an incentive and punishment structure to guide behavior. Things are made tax deductible or not all the time. We don't need to get into questions of morality. And there's no issue with enforcement here. You say it's not deductible and maybe you audit their books after a few years. If they tried to write it off, come down on them like a ton of bricks.

So we should not make environmental cleanup tax deductible? What about organizations who do environmental cleanup in general without having made spills?

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

#57

Post by dundarious »

vorpalhex wrote: post #56
dundarious wrote: post #53

Earlier quoted context omitted.

The tax code is absolutely used as an incentive and punishment structure to guide behavior. Things are made tax deductible or not all the time. We don't need to get into questions of morality. And there's no issue with enforcement here. You say it's not deductible and maybe you audit their books after a few years. If they tried to write it off, come down on them like a ton of bricks.

So we should not make environmental cleanup tax deductible? What about organizations who do environmental cleanup in general without having made spills?

Ideally, restitution should not be deductible, but it is. My understanding is that that's a pretty recent development, meaning it doesn't have to be so, and if it's undesirable, it can be changed. I think looking at it specifically from the angle of environmental disasters isn't useful or appropriate.

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

#58

Post by beerandt »

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.

Expenses just reduce your net income. It costs money to cleanup an oil spill.

The fines, afaik, are not tax deductible and are paid after calculating taxable income.

This is true for any business, but I don't get why oil gets singled out by people describing this type of accounting as oil companies getting a government subsidy. It just means expenses were higher, so net income and profit are lower, which is the amount you pay taxes on.

It's not that complicated.

Now if the government pays for part of the cleanup, and for some reason that amount is forgiven for whatever reason (maybe as part of a settlement), then that forgiven debt is considered taxable income.

It's standard businesses accounting, whether oil company or any other type of business.

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

#59

Post by lostlogin »

dkdk8283 wrote: post #22
lostlogin wrote: post #8

Earlier 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. Like it or not it was completely legal.

Laws come and go. It’s not hard to think of things that seem blatantly wrong now, that were formerly legal. Do we describe those that wanted the law changes that have since occurred as ‘virtue signalling’?

Making money by pouring oil into the environment seems pretty clearly wrong.

I’d argue that the behaviour of the protagonists in the article is virtue signalling, they are seemingly doing good things for their community while actually damaging the place.

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