Comments on: Bob Cesca’s Awesome Health Care Post

By: farsider

farsider — Fri, 10 Jul 2009 21:24:47 +0000

Ok lets look at it like this. I think they should be able to write off the equipment the day they buy it as an expense. If/when they sell it they report the revenue. Anything short of that is really a loan to the government at no interest.

By: cassandra_m

cassandra_m — Fri, 10 Jul 2009 20:58:01 +0000

Besides what they spend on the equipment is income to the selling company and is taxed there.

Not entirely, if not at all, if they are taking the deprecation deductions or credits.

By: farsider

farsider — Fri, 10 Jul 2009 20:23:00 +0000

When the company raises its prices to cover the costs of equipment then they pay tax on that revenue, so it isn’t double dipping. Besides what they spend on the equipment is income to the selling company and is taxed there.

By: cassandra_m

cassandra_m — Fri, 10 Jul 2009 20:19:08 +0000

Now you are being silly — and clearly have no idea how this works. But this seems to be part and parcel for the so-called party of business. I do this in my day job for million dollar + pieces of equipment and you better believe there is double dipping — the reduction in taxes from the gov and recovery of (at least some) costs from customers.

If you want to defend the subsidy for cost recovery then do that when you’ve actually gotten how this works. Until then the only thing you are doing is trying to pretend that there are no tax subsidies for equipment purchases by business — when the government clearly does this in order to get businesses to buy more equipment.

By: farsider

farsider — Fri, 10 Jul 2009 19:58:30 +0000

Try thinking of it this way, if a company raises its prices to account for the depreciation and is not able to account for the cost of equipment anywhere then they are going to have a higher calculated profit and pay more taxes than should be due.

By: farsider

farsider — Fri, 10 Jul 2009 19:54:02 +0000

Admit it you are just being silly now.

By: cassandra_m

cassandra_m — Fri, 10 Jul 2009 19:21:47 +0000

Actually, no. Depreciation is just another way to recover the cost of equipment. This time via the tax code — rather than by allocating it to your overhead or projects for recovery.

Which, BTW, you can still do if you are depreciating it. Double-dipping to recover costs.

By: farsider

farsider — Fri, 10 Jul 2009 19:18:32 +0000

The depreciation reflects the ‘cost’ of the equipment deteriorating over time. This is a real cost and is and has been accounted for as such.

By: cassandra_m

cassandra_m — Fri, 10 Jul 2009 19:15:34 +0000

So then we are back to depreciation deductions or credits — if said business actually needed a piece of equipment, can use it for operations and can allocate the cost of that equipment to some portion of client cost, it seems to me that the market has taken care of the costs of that equipment. Special tax treatments — subsidies — aren’t needed, much less need acceleration. Because the markets will take care of your costs for equipment.

By: farsider

farsider — Fri, 10 Jul 2009 19:03:38 +0000

Absolutely correct, now you are getting it.

By: cassandra_m

cassandra_m — Fri, 10 Jul 2009 18:42:28 +0000

By that reasoning, we don’t need to provide taxpayer subsidies for drilling , mining or nuclear efforts, right? Because if these were affordable and/or reasonably functional it would not take subsidy to make this happen — the markets would take care of it, yes?

By: farsider

farsider — Fri, 10 Jul 2009 17:20:46 +0000

We have plenty of energy resources in this country if congress would let us use them. If the Electric car were affordable and reasonably functional it would not take a subsidy to sell one. They are neither and government checks just steal from the treasure to support another fools errand.

By: cassandra_m

cassandra_m — Fri, 10 Jul 2009 17:10:52 +0000

It is a subsidy for an industry we badly need. Plenty of other countries are subsidizing not only alternative energy installations, but research too. The countries with the better technologies and solutions get to sell that to everyone else. But we’ll count you as one of those who thinks that sending a river of money to the Middle East — to lots of people who would use that money against us — is a good idea. The path to energy security looks just like this.

By: farsider

farsider — Fri, 10 Jul 2009 16:46:33 +0000

You are right it isn’t just a subsidy for an overpriced car, it is a subsidy for an overpriced industry. That makes it much better.

By: cassandra_m

cassandra_m — Fri, 10 Jul 2009 16:33:11 +0000

This is from the Bailout Bill back in October -- and provides a subsidy for: Tax credits for the purchase of plug-in hybrid electric vehicles. (Earlier post.) The credit is a base $2,500 plus $417 for each kWh of battery pack capacity in excess of 4 kWh, to a maximum of $7,500 for light-duty vehicles; $10,000 for vehicles with gross vehicle weights of more than 10,000 but less than 14,000 pounds; $12,500 for vehicles with a GVW of more than 14,000 but less than 26,000 pounds; and $15,000 for any vehicle with a GVW of more than 26,000 pounds. The Volt is qualified for that right now, others maybe and this subsidy begins to phase out after 250K PHEVs are sold. But, HEY! This bill also provides for additional subsidies for additional categories of celluosic ethanol, biodeisel, extensions of all kids of tax credits (subsidies) for other fuels and refineries, and all kinds of other alternate fuel initiatives. So it isn't just a subsidy to a car that people couldn't afford, it is a subsidy to a whole industry that the government wants to grow. Go figure.