Promoted from the Ricochet Member Feed by Editors Created with Sketch. Bernie Sanders’s Astoundingly Wrongheaded Tweet Of The Day

 

Leaving aside that I am not a fan of “corporate welfare,” the tweet below from Senator Bernie Sanders demonstrates a lack of understanding about the oil industry and corporate finance. First of all, most oil and gas companies are not large corporations. Furthermore, many of them are filing for bankruptcy due to low oil and gas prices. And as they provide vital commodities whose prices are subject to wild swings, perhaps it is understandable that they receive some advantageous tax treatment. This Forbes article, for instance, refutes the myth of “rich” oil companies not paying their “fair share;” it’s also a few years old, but its points remain valid.

The more outlandish claim is that corporations “get rich.” Sanders doesn’t seem to understand that companies generally don’t just sit on their cash; they invest in capital expenditures and acquisitions, which usually results in additional American taxpayers being put to work. They also often pay dividends, which rewards American taxpayers with income.

But Sanders’s cartoonish understanding of the petroleum industry ensures that he doesn’t understand — or, more likely, doesn’t care — about these facts. In addition, he has an unrealistic view of the viability and capacity of alternative energies to provide our needs in the near future. His ideology leads him to demonize the goose that lays the golden eggs: an industry that provides us heat, light, power, transportation, plastics, paint, chemicals, and countless other things that make modern life possible.

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  1. livingtheLoneStarlife Inactive

    Johnny Dubya: He has a cartoonish view of the American petroleum industry.

    FIFY

    The man and his followers haven’t the most basic understanding of economics. It’s staggering that such ignorance is being celebrated.

    • #1
    • May 24, 2016, at 9:13 AM PDT
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  2. Randy Weivoda Moderator
    Randy Weivoda Joined in the first year of Ricochet Ricochet Charter Member

    62%, huh? I wonder what percentage of Americans can explain just what special tax breaks fossil fuel companies get. I wonder what percentage of Americans have any idea of how much oil companies pay in federal taxes and how that compares to the amount of money they return to their shareholders. Does Bernie Sanders himself know these answers?

    • #2
    • May 24, 2016, at 9:27 AM PDT
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  3. Austin Murrey Inactive

    Randy Weivoda:

    62%, huh? I wonder what percentage of Americans can explain just what special tax breaks fossil fuel companies get. I wonder what percentage of Americans have any idea of how much oil companies pay in federal taxes and how that compares to the amount of money they return to their shareholders. Does Bernie Sanders himself know these answers?

    In order: Probably not. I’d guess 0%. I’d guess 0.000001%, that percentage being their accounting department. No.

    • #3
    • May 24, 2016, at 9:29 AM PDT
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  4. PHCheese Member

    There are ten gas stations within 5 miles of my house. There is one post office.

    • #4
    • May 24, 2016, at 10:24 AM PDT
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  5. Johnny Dubya Inactive
    Johnny Dubya

    livingthehighlife:

    Johnny Dubya: He has a cartoonish view of the American petroleum industry.

    FIFY

    Oh, for sure, it goes way beyond the oil industry.

    I work on Wall St. covering the oil and gas industry. Imagine the warm and fuzzy feelings I have for Sen. Sanders and his proclamations.

    • #5
    • May 24, 2016, at 10:32 AM PDT
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  6. Johnny Dubya Inactive
    Johnny Dubya

    Randy Weivoda: …I wonder what percentage of Americans can explain just what special tax breaks fossil fuel companies get. I wonder what percentage of Americans have any idea of how much oil companies pay in federal taxes and how that compares to the amount of money they return to their shareholders. Does Bernie Sanders himself know…?

    Subsequent to your comment, I added in the OP a link to an article that discusses the “special tax breaks”:

    First off, the president doesn’t think that oil companies should be able to get credit on their U.S. income tax bills for all the billions in income taxes they pay to [other countries]. Second, the president doesn’t think Big Oil should be allowed to deduct from taxable income some of those costs incurred in exploring for oil and drilling wells. Third, the president wants to cancel oil companies’ domestic manufacturing tax deduction of 6% of the value of oil and gas they produce in the United States.

    Two out of three of the “special tax breaks” are not “special” to the petroleum industry at all. And consider the fact that this industry singled out for “special” tax hikes is also the industry that over the past few years has been a singular success in putting people to work and reducing U.S. dependence on foreign energy sources.

    Progressives love to punish success, whether achieved by an individual or by a corporation – even when such success benefits the country as a whole.

    • #6
    • May 24, 2016, at 10:56 AM PDT
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  7. Randy Weivoda Moderator
    Randy Weivoda Joined in the first year of Ricochet Ricochet Charter Member

    Johnny Dubya: First off, the president doesn’t think that oil companies should be able to get credit on their U.S. income tax bills for all the billions in income taxes they pay to [other countries]. Second, the president doesn’t think Big Oil should be allowed to deduct from taxable income some of those costs incurred in exploring for oil and drilling wells. Third, the president wants to cancel oil companies’ domestic manufacturing tax deduction of 6% of the value of oil and gas they produce in the United States.

    The first two provisions aren’t really special tax breaks for the oil industry, are they? That’s pretty much the way all businesses are taxed, I think. And if the next president wants to get rid of provision 3, it ought to apply to all industries, not just the oil industry. It sounds to me like the Socialists and Democrats are the parties that wants special provisions in the tax code for fossil fuels. They want them to be especially punished, rather than treating them like other companies.

    Maybe President Sanders can do to the American oil industry what Chavez did to Venezuela’s.

    Edit: Somehow I missed the second to last paragraph of your comment #6 and went on to say the same thing.

    • #7
    • May 24, 2016, at 11:11 AM PDT
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  8. Johnny Dubya Inactive
    Johnny Dubya

    Randy Weivoda:

    Johnny Dubya: ….

    The first two provisions aren’t really special tax breaks for the oil industry, are they? That’s pretty much the way all businesses are taxed, I think.

    The first reference is to a provision that applies to all companies that pay taxes overseas. I think the second reference is to the “successful efforts” versus “full cost” accounting methods for oil and gas, so that would be specific to the industry. Some oil and gas companies choose the former, and some the latter. It’s mostly driven by a desire to show greater net income for investors, rather than by tax considerations.

    And if the next president wants to get rid of provision 3, it ought to apply to all industries, not just the oil industry.

    The third reference is to the Section 199 Deduction, which applies to certain manufacturing activities, so while it is not specific to the oil industry, it does not apply to all industries.

    Maybe President Sanders can do to the American oil industry what Chavez did to Venezuela’s.

    Shudder. My dad got his start in the oil business in Venezuela in the 1950s. Things looked promising, then. U.S. oil companies came in to help the Venezuelans develop the resource.

    Eventually, oil earnings were used to “bribe” the populace into placidity, and PDVSA – the state oil company – became politicized. This situation reached its nadir when Chavez fired most of PDVSA’s upper and middle management. It has never really recovered.

    • #8
    • May 24, 2016, at 11:38 AM PDT
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  9. Ekosj Inactive

    You have to understand, Sanders has a special disdain for the truth as it regards US businesses. In the immediate aftermath of the Financial Crisis, Sanders produced a report alleging that The Fed had loaned US banks 16.1 TRILLION dollars. 16.1 TRILLION!!!

    Since that is in excess of the entire GDP it is clearly a lie. But I was curious how the actual data was tortured into admitting to 16.1 trillion dollars. And I found it in a footnote to that report….

    If an institution borrowed 10 million dollars and rolled that single loan over every day for 30 days before repaying it, that single 10 million dollar loan shows up in the “aggregate borrowing” as 300 million dollars. (30 X 10 million) If that same institution borrowed the same 10 million dollars for the same 30 days but did the initial loan as a 30 day term loan instead, that loan shows up as “aggregate borrowing” of only 10 million dollars.

    Cute!

    I used to think that Bernie was so dumb that he did not understand that this is a blatant fabrication. But after watching him during the campaign I don’t see him as stupid. The nice old man is as evil as Hillary. I now believe he understands that he is fabricating these things completely. He just doesn’t care. He despises capitalism, capitalists, and the horse they rode in on so much that no lie is beyond the pale.

    • #9
    • May 24, 2016, at 1:38 PM PDT
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  10. Randy Weivoda Moderator
    Randy Weivoda Joined in the first year of Ricochet Ricochet Charter Member

    Ekosj: I used to think that Bernie was so dumb that he did not understand that this is a blatant fabrication. But after watching him during the campaign I don’t see him as stupid. The nice old man is as evil as Hillary. I now believe he understands that he is fabricating these things completely. He just doesn’t care. He despises capitalism, capitalists, and the horse they rode in on so much that no lie is beyond the pale.

    With many candidates we’re forced to wonder if they are really that stupid, or if they are just pretending so they can appeal to the stupidest voters.

    • #10
    • May 24, 2016, at 1:46 PM PDT
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  11. Marion Evans Inactive

    I thought Sanders voters didn’t have a dime.

    • #11
    • May 25, 2016, at 9:09 AM PDT
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  12. Bereket Kelile Member
    Bereket Kelile Joined in the first year of Ricochet Ricochet Charter Member

    Randy Weivoda:62%, huh?

    Randy is getting to the important point. This says more about the measure of that opinion than anything else. My suspicion is the question biases a higher positive response.

    That being said, it’s a tricky issue because conservatives often get stuck with having to defend oil companies, who are not well-loved. We did some research on this issue not long ago and found that people tend to be green until it hits them in their bank account That is, everyone except rich, white liberals.

    I think the lesson for our folks is not to defend oil companies but to defend the middle class. YOU get screwed when gas prices go up because of higher taxes and onerous regulations. That’s a message that splits the democrats right down the class divide.

    • #12
    • May 25, 2016, at 9:23 AM PDT
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  13. Misthiocracy got drunk and Member
    Misthiocracy got drunk and Joined in the first year of Ricochet Ricochet Charter Member

    Bernie clearly learned at Sir Humphrey’s knee:

    • #13
    • May 25, 2016, at 9:34 AM PDT
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  14. Austin Murrey Inactive

    Misthiocracy:Bernie clearly learned at Sir Humphrey’s knee:

    One of the best scenes in a series of great scenes.

    I still think “The Key” is the best half-hour of television ever filmed.

    • #14
    • May 25, 2016, at 9:42 AM PDT
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  15. Big Green Inactive

    Randy Weivoda:

    The first two provisions aren’t really special tax breaks for the oil industry, are they? That’s pretty much the way all businesses are taxed, I think. And if the next president wants to get rid of provision 3, it ought to apply to all industries, not just the oil industry. It sounds to me like the Socialists and Democrats are the parties that wants special provisions in the tax code for fossil fuels. They want them to be especially punished, rather than treating them like other companies.

    Maybe President Sanders can do to the American oil industry what Chavez did to Venezuela’s.

    Edit: Somehow I missed the second to last paragraph of your comment #6 and went on to say the same thing.

    On the first one, I don’t think it is a credit for foreign income taxes paid they are trying to eliminate. I believe it is the royalty payments oil and gas companies pay to foreign governments for which Obama wants to disallow as a tax credit but leave it as a deduction.

    • #15
    • May 25, 2016, at 10:16 AM PDT
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  16. Johnny Dubya Inactive
    Johnny Dubya

    I do “recommend” following Sanders on Twitter to gain insight into the wrongheaded or downright ignorant views of the senator and his supporters. I have not read a tweet of his that I remotely agree with, with the exception of some that are pro-veteran.

    • #16
    • May 25, 2016, at 10:37 AM PDT
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  17. La Tapada Member

    Johnny Dubya:I do “recommend” following Sanders on Twitter to gain insight into the wrongheaded or downright ignorant views of the senator and his supporters.

    Following Sanders on twitter would depress me.

    I have not read a tweet of his that I remotely agree with, with the exception of some that are pro-veteran.

    And the ones that are anti-Hillary.

    • #17
    • May 25, 2016, at 11:36 AM PDT
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  18. The Reticulator Member

    Which tax break did he want to eliminate? The one that lets you deduct expenses from income?

    • #18
    • May 25, 2016, at 2:24 PM PDT
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  19. Johnny Dubya Inactive
    Johnny Dubya

    La Tapada:

    Johnny Dubya:I do “recommend” following Sanders on Twitter to gain insight into the wrongheaded or downright ignorant views of the senator and his supporters.

    Following Sanders on twitter would depress me.

    I have not read a tweet of his that I remotely agree with, with the exception of some that are pro-veteran.

    And the ones that are anti-Hillary.

    Yes, of course!

    Sanders’s tweets do not depress or anger me, because they’re just so…dumb. His mind is a warehouse of bad ideas, misinformation, misperceptions, myths, fallacies, and delusions. He’s the crazy old guy down the block who buttonholes you and bends your ear while you roll your eyes. It’s actually kind of funny, in a way.

    What I find depressing is that millions of voters think Bernie is right on the money.

    • #19
    • May 25, 2016, at 3:48 PM PDT
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  20. The Reticulator Member

    Johnny Dubya: And as they provide vital commodities whose prices are subject to wild swings, perhaps it is understandable that they receive some advantageous tax treatment.

    One way to approach this issue is to point out that Democrats have long decried short-term thinking in corporate America. So if we want energy companies to think long-term, we need to structure the taxes to allow for the boom and bust nature of their business.

    I don’t happen to know if the current tax laws do this or if they are reasonable, but if Bernie’s people don’t have the IQ to think in these terms, then we’re not going to have a reasonable discussion about it.

    And besides, industry-wide tax breaks are not nearly as big a problem or as prone to corruption as are narrowly targeted tax cuts or even worse, subsidies. (Think Solyndra, wind farm subsidies, and solar farm subsidies.)

    • #20
    • May 25, 2016, at 9:30 PM PDT
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