Observed EV tax credit market distortion

[ME_Andy]

In 2024 there is a US tax credit on EV's and there is no USA tax credit or subsidy on oil. If I am wrong on that fact - feel free to correct me? To date on this board no one has been able.

"His new budget proposal calls for the elimination of $35 billion in tax breaks that would otherwise be provided to the industry over the next decade."

https://www.nytimes.com/2024/03/15/climate/tax-breaks-oil-gas-us.html

 

[ME_Andy]

"The oldest, known as “intangible drilling costs,” was created by the Revenue Act of 1913 and was aimed at encouraging the development of U.S. resources. The deduction allows companies to write off as much as 80 percent of the costs of drilling, things like employee wages and survey work, in the first year of operation, even before producing a drop of oil."

"Another subsidy, dating from 1926 and known as the depletion allowance, initially let oil companies deduct their taxable income by 27.5 percent"

So they've been subsidized for a hundred years, literally.

 

[SC Maintenance]

"The oldest, known as “intangible drilling costs,” was created by the Revenue Act of 1913 and was aimed at encouraging the development of U.S. resources. The deduction allows companies to write off as much as 80 percent of the costs of drilling, things like employee wages and survey work, in the first year of operation, even before producing a drop of oil."

"Another subsidy, dating from 1926 and known as the depletion allowance, initially let oil companies deduct their taxable income by 27.5 percent"

So they've been subsidized for a hundred years, literally.

These are not subsidies. These are tax deductions against earnings like every other US business.. I am sure the New York Slimes knows this but aren't respectable enough to print truth.

If you file for a tax ID and drive for Uber, and buy vehicle for that purpose - you can depreciate 20% of the vehicle in year one. Its a 6 year depreciation schedule. Its nots a subsidy - its a legitimate business expense, deducted from revenue. If you buy a flashy uber light for your uber car you can deduct 100% of that cost in year one. Are we subsidizing the uber driver also? According to above article, we are.

Every business on earth gets to deduct legitimate expenses. Do you think somehow an oil company drills an expensive hole in the ground that doesn't produce oil that somehow that is not a legitimate cost? But its OK for Tesla to deduct billions working on the robo taxi that still doesn't work. I have no problem with this either, but apparently you should?

I'll make this super simple. The EV credit is IRS code Section 70D. Please point me to a similar credit / subsidy in the IRS tax code for big oil, not some article from a biased source. It should be super easy, because according to all these groups there literally everywhere.

 

[ME_Andy]

I think you're splitting hairs. An 80% deduction!? Come on. An old industry like oil and gas doesn't need that.

 

[alarmguy]

"His new budget proposal calls for the elimination of $35 billion in tax breaks that would otherwise be provided to the industry over the next decade."

https://www.nytimes.com/2024/03/15/climate/tax-breaks-oil-gas-us.html

Kind of funny if you think about it. The public thinks gasoline is the main product of oil. The entire public benefits from any tax breaks.
Any so called breaks from propaganda material will affect all Americans in cheaper prices..3 billion in tax breaks a year is pennies.Its laughable the amount of money vs what the oil industry pays.

on another note
IN ONE MONTH back in Jan the US Treasury made 135 MILLION in advance tax credits to a handful of people who bought an Electric Vehicle. That is just in advanced. SO the so called phony oil subsidies are insignificant pennies compared to giving away tax dollars to car companies who make EVs. Pure profit for them and a nice break for the middle to upper middle class.

 

[JeffKeryk]

These are not subsidies. These are tax deductions against earnings like every other US business..

Well, that depends on what how you define the term...

A subsidy is a benefit given to an individual, business, or institution, usually by the government. It can be direct (such as cash payments) or indirect (such as tax breaks). The subsidy is typically given to remove some type of burden, and it is often considered to be in the overall interest of the public, given to promote a social good or an economic policy.