#Energy Profits Levy

[indizombie]

The soaring cost of energy in the wake of Russia's invasion of Ukraine has delivered windfall gains to Qatar which this year expects to earn about $76 billion in tax from its energy exports. Qatar's budget surplus last year, buoyed by energy exports, was 45 times bigger than the previous year. The UK's energy exports last year delivered tax revenue that was nine times higher than the previous year, after the Conservative government introduced an Energy Profits Levy to compensate consumers as domestic power bills soared. Despite intense lobbying and continued opposition from the oil giants, the UK lifted its headline tax rate for oil and gas producers to 75 per cent, from 40 per cent. And still the companies delivered record profits to shareholders. The UK government expects to pull in an average of 8.6 billion pounds ($16 billion) over the next six years, compared with a yearly average of just 800 million pounds ($1.5 billion) in the six years to last June.

Ian Verrender, 'Why Australia lags behind the rest of the world in taxing oil and energy giants’, ABC

[eaglesnick]

Private Sector Good Public Sector Bad

According to textbook definitions,  the “private sector” it is that part of the economy that is owned and controlled by individuals and businesses rather than by government. As such, those individuals and businesses are entitled to pocket ALL profits made, minus taxes paid to government.

According to neoliberal economic theory, a theory much championed by Rishi Sunak and previous Conservative governments, this leads to cost effectiveness and maximised efficiency throughout the economy.

Jolly good! This is very much mainstream economic theory and has been ever since Margaret Thatcher was PM. But what Conservatives (and Labour) never do is follow through on their   economic beliefs! 

If those individuals and businesses in the private sector are entitled to ALL the profit they make, then it follows in my mind that they are also liable for any costs they incur. And it also follows that if they mess up, miscalculate or over-stretch themselves financially, then they should bare ALL of the costs of their own failures.

But that isn’t what happens. Remember the banking crisis? The greedy banks over-reached themselves, lending out too much money on bad assets. We the taxpayer had to bail them out. The last ten years of falling standards of living are in large part due to the Austerity policies introduced by Tory governments to help shore up the privately owned financial sector of the economy.

Nothing has changed. Yesterday, were heard the good news that household yearly energy costs will fall by approximately £150. Whoopee! The bad news is that standing charges energy companies can impose will be allowed to rise and might wipe out the above savings.

Only two of the six big suppliers of energy to the UK are British owned. In 2020, these companies did very well for themselves.

“The UK’s ‘Big Six’ energy companies made over £3billion in profit in 2020."  (Big Issue: 04/02/22)

Hardly a struggling market you would of thought. Yet our Tory government is charging every one of us for those PRIVATE companies that failed in a business where it seems ridiculously easy to make huge profits.

“The secret £200 bill you’ll pay for failed energy firms” Telegraph: 09/0422)

Sunak repeatedly tells us that inflation is the main enemy of the economy yet he raised the standing charge by a massive 80% last year.

“Ofgem refuses to change ‘unjust’ standing charge policy, which has seen fees rocket as much as 80%"  (inews: 18/08/22)

And this year we have this

“Standing charges will rise again…"  (moneysavingexpert: 25/08/23)

The decision to raise standing charges can be laid at the door of government, as it is the government agency Ofgem that  “takes decisions on price controls and enforcement.”  As Martin Lewis rightly tells us,:

“The level of standing charges and unit rates, and the split between the two of them, is set by Ofgem.”  (moneysavingexpert: 04/07/23)

 And as usual in this topsy-turvy world of Tory economic policy it is perfectly acceptable for foreign firms to make huge profits from the British consumer, but not all right for them to take a hit when businesses fail.

[argumate]

Expert policy-makers in Western capitals feel that they have to make a response to major historic challenges like climate or the rise of China, or South Africa’s energy crisis. It is their job to look to the future and to devise at least purportedly rational strategies of power. But those who make policy on such matters as sustainable development do not hold the purse-strings and have limited capacity to shift budget-constraints. Those that do set budgets, either do not care about broader global issues, prefer other tools for affecting those goals - such as military power - or are revenue constrained and unwilling to levy more revenue from their constituents for the far-flung goals favored by the policy-making elite.

There is thus never “enough money” for the softer and more complex dimensions of development and global policy. But, despite these all too obvious limitations, the policy-machine grinds on. Faut de mieux those tasked with geoeconomic policy and sustainable development cooperate to come up with programs like JET-P. The policies tick all the boxes as far as sophistication of design and conception. Powerful interests - notably high-finance - ensure that they are arranged, at least notionally, so as to offer derisking and to promote the vision of public-private partnership. The promise of “mobilizing” private money helps to paper over the lack of solid public funding.

But despite all the self-interested engagement by private finance, the fiscal constraint remains paramount. The forces interested in global development are not as powerfully engaged as they are around the military-industrial complex, oil and gas or the Wall Street nexus. The result are ambitious and professionally designed policies that whip up waves of enthusiasm in the ranks of analysts, think tanks, NGOs, pundits, but which have no prospect of materially affecting reality either with regard to the announced policy objective or the profit opportunities of Western capital.

From experience since 2021 the conclusion we must surely draw is that the one interest that such policies undeniably serve is the perpetuation of the policy circuit. Practical effectiveness is not necessarily the main driver of policy-generation. Indeed, failure may be productive in generating new policy. This not only perpetuates the machinery of policy-making. More importantly it contributes to the generation of a “state effect” - the US has a policy for x,y,z. It sustains the common sense that the world is governed and that “governance” is in some sense a coherent process.

brutal

[mariacallous]

On a chilly spring morning in March, British coast guards spotted something unusual around 100 kilometers off the Scottish shoreline: a dark stain, stretching 23 kilometers into the North Atlantic Ocean.

According to an internal analysis prepared by the coast guard’s satellite services and seen by POLITICO, the likely source of that stain was Innova, a tanker roughly the size of the Eiffel Tower that at the time was hauling 1 million barrels of sanctioned oil from Russia on its way to a refinery in India.

Yet the coast guard did little to investigate further, and the tanker — free from any repercussion — continues to trade oil today, helping fill the Kremlin’s war chest more than two years into its full-scale invasion of Ukraine.

The Innova is just one of hundreds in the world’s so-called shadow fleet, a collection of often aging, poorly maintained ships sailing in defiance of Western sanctions — and spreading environmental harm without consequences. 

A joint investigation by POLITICO and the not-for-profit journalism group SourceMaterial found at least nine instances of covert shadow fleet vessels leaving spills in the world’s waters since 2021, using satellite images from the SkyTruth NGO paired with shipping data from market analysis firm Lloyd’s List and commodity platform Kpler.

Swedish Foreign Minister Maria Malmer Stenergard told POLITICO the ships posed a “significant danger” to the marine environment. “The incidents [here] illustrate this.”

It’s a problem that’s only grown worse following Russian President Vladimir Putin’s full-scale invasion of Ukraine. With Moscow under Western sanctions, an increasing number of tankers are ferrying illicit goods — and potential environmental devastation — across the globe. Not only are these vessels creaky and largely unregulated, they’re often uninsured, meaning that in case of a leak, or more serious spill, a government would struggle to hold them accountable. 

POLITICO and SourceMaterial identified discharges everywhere from Thailand to Vietnam to Italy and Mexico, all linked to the shadow fleet. The tankers also passed through busy shipping corridors like the Red Sea and the Panama Canal, meaning any serious accident could rupture international trade routes. 

Experts believe it’s only a matter of time before one of these ships suffers a catastrophe with major environmental — and economic — devastation.

“The oil spills and risk of slicks are horrendous,” said Isaac Levi, Europe-Russia lead and a shadow fleet expert at the Centre for Research on Energy and Clean Air (CREA), a think tank. “Beyond the environmental damage, some of which will be irreversible, it’s a huge impact to coastal states that have to bear the cost of cleaning this up.”

In short: “It’s a ticking time bomb,” Levi said.

[mezzopieno-news]

LE EMISSIONI DI CO2 AI MINIMI DA 60 ANNI NELL’UE

Le emissioni di CO2 prodotte da combustibili fossili nell’UE nel 2023 hanno toccato il livello più basso degli ultimi 60 anni.

L’Unione Europea ha emesso l’8% in meno di anidride carbonica rispetto al 2022, spingendo i progressi nella riduzione delle emissioni climalteranti e registrando un’accelerazione. Più della metà del calo (56%) deriva da un mix di elettricità più pulito, con il continuo aumento della capacità eolica e solare, nonché un rimbalzo della disponibilità di energia idroelettrica e nucleare. Le emissioni di CO2 dell’UE derivanti dal carbone si sono dimezzate dal 2015 e hanno registrato una diminuzione del 25% rispetto all’anno precedente. Le emissioni legate al gas sono diminuite dell’11% e quelle di petrolio del 2%.

Secondo l’analisi del Centre for Research on Energy and Clean Air (Crea) “Le emissioni di CO 2 dell’UE sono finalmente tornate ai livelli riscontrabili nella generazione dei miei genitori negli anni ’60”, ha dichiarato Isaac Levi, analista di Crea. “Tuttavia, in questo periodo di tempo, l’economia è triplicata, dimostrando che il cambiamento climatico può essere combattuto senza rinunciare alla crescita economica”.

I dati del 2023 mostrano che L’UE ha costruito livelli record di pannelli solari e turbine eoliche ed è stata in grado di produrre più elettricità da dighe e centrali nucleari. I tagli in settori come l’industria – dove gli alti prezzi del gas hanno portato alcune aziende a diventare più efficienti e altre a produrre meno beni – e i trasporti hanno rappresentato un terzo delle riduzioni.

___________________

Fonte: Centre for Research on Energy and Clean Air (Crea); foto di Jon

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[edaworks]

lololol y'all hey guess what!

Voters are being set up as economic cannon-fodder for a second red sweep in the US midterms!

"Hot take," you say? "It's only a few countries," you say? "What do you mean $5/gal. gas," you say? "Wasn't Trump going to fix the economy," you say?

Well - read on. It's not quite that simple.

This is a long one so bear with me. I promise I'll get to the Congress stuff. (Click links under images/in unbolded underlines for sources.)

The Oil Trade and The Tariffs:

We've all heard about the Trump Tariffs. So far he's imposed:

25% tariff on Mexican imports, full stop (Mexico is also imposing retaliatory tariffs)

10% tariff on Chinese imports (China, by the way, will be suing us over this)

25% percent tariff on Canadian imports, with a carveout that energy imports will be subject to a 10% tariff

Trump is already under fire for these, and already trying to pass off the consequences as a necessary evil on social media, in...in capslock:

"Worth the price?" Okay. Then let's unpack that price.

I'm going to primarily take Canada as an example here, and I am not at all intending to discount the tariffs levied on goods from China and Mexico by doing so. Rather - I'll primarily talk about about Canada because I want to talk about oil.

The US does almost $3B USD in business with Canada PER DAY. CA exported $550B USD in goods to the US last year. Roughly 3/4 of ALL Canadian exports come to the US.

Trudeau has just announced the following tariffs on exports to the US (which most of us anticipated):

CA will impose 25% tariffs on C$155 billion of US goods

Trudeau says C$30 billion will take effect on Tuesday

Duties on the remaining C$125 billion will be due in 21 days

These have been imposed in (wholly justified) response to the tariffs imposed to-date by the US's illustrious new administration.

The interesting part for purposes of this post is the hilarious caveat that there will "only" be a 10% tariff on CA energy imports. That 10% adds up REAL quick, because "energy imports" includes imported crude oil/refined petroleum products -

And 60% of crude oil/52% of ALL petroleum products imported by the US come from Canada.

(We absolutely import petroleum products from/export to Mexico, too; US crude oil imports from Mexico were already slumping in 2022 and sure as hell will keep slumping now.)

Let's hear from an Actual Canadian who grew up smack in the middle of this industry! Hey @twosides--samecoin, d'you think the Irvings will pause for one second before bumping costs to pass that 10% tariff along to both Canadian and U.S. consumers (and while they're at it, bumping costs to well above "breakeven" to rake in profits, given the tariffs as a convenient excuse)? Because I don't.

"What happened to OPEC? Doesn't the US get most of their oil from them?" The US definitely still imports from OPEC+ countries, but Canada has provided the US with most of its imported petroleum products, both refined and unrefined, for over two decades:

Here's what that looks like by the numbers -

AND CONSIDER: the US imports this massive amount of crude oil even after hitting an all-time high for for its domestic oil production! In fact, in 2023, we were the world's largest producer:

"High domestic energy demand." That demand, by the way, is increasing alarmingly fast with AI development (and will continue to do so given the new administration's AI-friendly policies), the infrastructure for which currently consumes an obscene amount of energy. AI proponents have promised that it will eventually help reduce global emissions, but cannot yet deliver on those promises. (An aside, this is an increase in domestic energy usage that the US grid system ABSOLUTELY cannot support.)

The "double whammy" increase in petroleum costs this will cause cannot be understated.

The US is historically dependent upon foreign oil and to date this has significantly factored into the direction of US foreign policy. It's not just with respect to Canada where that policy has just been tossed out the window. The new administration has systematically escalated or started pissing contests with a majority of the foreign powers upon whom the US depends upon for imported petroleum products.

For instance - even with the ceasefire in Gaza we are seeing absolutely wild policy takes that continue alienating the pro-Palestinian members of OPEC+ (and discounting the personhood of Palestinians - a separate issue which is way too big to get into in this post):

"But fucking why," you ask?

Interestingly, pissing off foreign exporters and making foreign petroleum imports prohibitively expensive can serve as VERY GOOD leverage to remove protections, regulatory controls for, and environmental protections surrounding domestic petroleum production. To a degree, upping domestic production will have to grind through bureaucratic processes that Trump vehemently despises -

- however, as the above-linked article acknowledges:

It will be "time-consuming" because the new administration cannot simply sign executive orders to get rid of every safeguard imposed. These safeguards are not even primarily Biden-created - in fact, Biden got rid of many - and were imposed for various reasons: to prevent fast depletion of US oil deposits (a huge asset to keep in our back pocket in the event of, say, foreign wars that interrupt imports; global energy shortages; etc.), to control supply/keep export prices from tanking, to prevent the unmitigated destruction of protected lands which offer the easiest access to those deposits, et cetera.

So the one nearly insurmountable barrier Trump faces to what he views as "fixing the economy," in part by ending foreign oil dependence, is time. And time is not just a barrier because of legal "red tape." Time is a barrier because - and I cannot stress this enough - infrastructure to support increased domestic petroleum production will take time to build.

It will be years before domestic petroleum demand could conceivably be met by domestic petroleum production - nevermind by domestic refined petroleum production - even if all barriers to production vanished tomorrow.

Now I can talk about the larger picture, including the midterms. In the words of Bill Nye, it's time to Consider the Following.

The Midterms and The Setup:

TL;DR:

The new administration has put the cart before the horse with these tariffs, and knows it.

"But why not deal with removing barriers first, and boost domestic oil production before imposing tariffs? This approach means he's going to also screw over his supporters and create an economic crisis and-"

Because the goal is an economic crisis. This is not lack of forethought. This is 100% intentional.

Indulge me. Here's a possible playbook.

The current administration continues to alienate foreign petroleum producers by implementing tariffs and through political instigation. The cost of crude and refined petroleum products - and by extension gas and goods transported over land (including and especially food) - will go sky high in the US and stay that way. Remember how COVID "supply chain issues" were used as an excuse to drive rampant price increases, and how costs mysteriously stayed high after lockdown? Remember how we learned that a huge amount of this cost increase was artificial? Now add something like the 1973 oil embargo to that problem. I don't like that math.

As imported petroleum products remain prohibitively expensive, the new administration will find traction for its domestic crude production push among prior opponents. It will quickly become "un-American" to oppose, regulate, or cause anything to slow or curtail expansion of domestic crude production, including on protected lands. This will work. Centrists and many liberals will absolutely be convinced that drilling in protected lands looks very, very reasonable as gas and food prices go insanely high. They will feel the strain of the current party line vs. the pocketbook.

The GOP's constituents (and everyone else) will suffer from these actions. GOP leaders will scapegoat Dems/independents/other opposition to redirect blame for the sustained high cost of gas, food and other necessities. The GOP could then easily claim that all GOP opposition has created an economic crisis by trying to regulate/slow/limit domestic petroleum production.

The economic crisis blame game is a huge "vote grabber" during midterm elections in the US. GOP leaders will already be set up to blame opposition for economic strain, and will be well-positioned to use this as leverage to pick up new seats in the House and Senate, and keep their existing ones. (It will almost certainly have been primarily caused by the new hyper-nationalist and isolationist trade policies.)

The desirable outcome for the GOP: Keep both the House and Senate from flipping away from GOP control in 2026. Meanwhile, unfortunately, voters will be forced to line the pockets of US oil magnates and other conglomerates to a crippling degree.

It's a very simple setup - and it is a setup, because as I said earlier: energy and petroleum production infrastructure takes time to build. The new administration knows that it does not have that time before USAmericans feel the pinch: they also do not care. Absent a gratuitous federal subsidy to reduce gas prices, and no matter what the Dems/GOP opposition do or do not do between now and the midterms, the tariffs will - until removed - cause petroleum prices (and by extension everything else) to skyrocket and remain high.

And this is just one way in which we could see the GOP try to spin what's happening with the US economy - but no matter which way you slice this, any new economic crisis we're about to face can only be laid at the feet of the GOP's new trade policies.

The ultimate answer is, of course, to rescind the tariffs. But the new administration will need to break a major campaign promise to do that. However, they’re setting up to break a bigger campaign promise when the economy goes into a tailspin because they choose not to do it. Thanks for coming to my TED talk. BONUS:

"Hurrhurr I drive a Tesla-"

Nope. In this model scenario, you're screwed like the rest of us.

Why? Because our power bills are about to go sky high(er) too.

Guess what? We also IMPORT AND EXPORT energy from our closest neighbors - billions USD worth of trade, and that trade helps balance the power grid when our energy demands peak. Don't take my word for it - take the US Energy Information Administration's word for it.

That trade will be subject to the 10% Trump tariff for energy we import, and possibly to Trudeau's tariffs for energy we export! In addition, Trump is also hampering development of wind and other renewably-sourced power while this is all going on! Guess what that does? Drive up consumer electricity costs - or serve as an excuse for power companies to do so.

(And frankly even if this weren't the case, electric vehicles aren't a sustainable solution here. If everyone started using them we'd be screwed because our power grid isn't up to it. Take it from someone who spent a summer doing EXTREMELY detailed policy research on energy regulations and power transmission: Our grid is already way over capacity and held together by duct tape and chewing gum, and that is before we factor in rising AI energy consumption.) The Trump administration knows that energy costs will be a problem - it's why the Canadian energy import tariff will be "only" 10%. He wants a crisis - but not one that will impact his buddies in AI, you see. He also wants things to be bad - but not bad enough that he's unable to redirect blame.

And we're all going to suffer for it.

[kemregik]

A basal argument, acting as structural description, for Anthropogenic Climate Change Accelerationism, or anthropoclicha/acc, or acc/acc.

Necessity is the mother of invention. This is a fundamentally true axiom of human history. Whenever persons, communities, tribes, nations, the species is faced with an existential threat, the gift Evolution unthinkingly bestowed upon us activates to its highest potential and we think our way out of it.

Humans are iterative in nature; we build on everything our ancestors built, and every generation that successfully passes their additions down guarantees the next will exceed the benchmark set by the last. This is the force that drives us at increasing speed towards the mythical singularity of fellows like Nick Land (of whom I was not aware, formally, until I had this thought and decided it would be good to check if anyone had beaten me to this punch and I realized he was at the top of any discussion about accelerationism in general because he invented it, apparently) and the occasional Posadist. This iterative process can be, well, accelerated. Human history is uncountably littered with instances of deadly crisis creating salvific technolgical, scientific, and societal innovations. There is little argument to be made against the notion that humans are primarily loss-averse, and so, best motivated by those external forces that stress us maximally.

Allow me now, from this axiomatic foundation, to present a conclusion for your consideration as a validly constructed political position (and not as a directive I believe ought to be carried out) : the only reason we have not solved the issue of Anthropogenic Climate Change is because it is not yet an existential threat to the species, and the only way to generate the solution to Anthropogenic Climate Change is to worsen it until it becomes an existential threat to the species.

From the point of view of an acc/acc, by contributing to the degradation or instability of Earth's climate, you are forwarding the cause of climate science more effectively. You are generating the very stimulus required to create the solution, because no amount of public or private funding to a research institution will create innovation if there is no motivator towards research. Capital-S Science does not just throw shit at a wall to see what sticks, it focuses energy on solving problems and answering questions; from most urgent to least urgent. If your focus, ethically, is the promotion of scientific advancement, you by definition want scientists to be working towards a goal, and if you want a particular goal to be worked on, you need to give people a reason to work on it. The best reasons are threats. The best threats are those that levy the highest stakes.

What higher a stake than the fate of the species?

Note that this is NOT climate denial. The acc/acc here has fully admitted that Anthropogenic Climate Change is a real problem, a problem we are making worse by the day, but not bad enough for a critical mass of people to care enough to want to fix it yesterday.

At this point, one could say Enter Ancap and take the position that unrestrained capitalism is the most effective means of creating the climate crisis necessary to fix climate change, but I don't think this is necessary. There are statist answers to this challenge; I can imagine Mexico taking its nationalized petroleum industry and using legislation to force it to be as eco-hostile as possible, then taking the profits and dumping them into climate research institutions. There is no mandatory economic component to this ideology: so long as you make the damage bad enough, the scientific community will produce technology to reverse the effects of the damage you're doing, how you arrive at this point is ideologically inconsequential.

There is no mandatory utopian component here either, to be clear. The acc/acc doesn't need to believe that fixing the climate will bring about some sort of ideal human society in order to want to fix the climate, but I suspect that the primary motivator, ethically speaking, for any genuine acc/accs will be this belief.

I am terrified to think that in the near future, this sort of applied doomerism might become politically feasible to hold unironically. There are enough scientifically literate revolutionaries (I use that word very loosely here) hanging out in polcompball-flavored coffee shops—I think the kids call them "Discord servers"—for this to catch on eventually given the general distrust in academia and the scientific community at large in the current era, so I will not be surprised when banners reading "tree-huggers for deforestation" start showing up in Lafayette Park.

[libertineangel]

Hey remember how the UK has spent the last several years in the midst of a cost-of-living crisis as the working-class freeze & starve while supermarkets & energy companies rake in record billions in profits?

Well shit's about to get even worse!!!

[earhartsease]

the utter fucking gall

Campaigners criticised the move arguing that energy companies continue to rake in billions in profits, while many consumers are struggling with their bills.

[freenorthnow]

Oil companies have made record profits by overcharging energy providers. Now we're paying the price, the whole lot should be nationalised.

[oneminutemoneymagazine]

Pepsi Cola's New Recipe and the UK Sugar Tax

As background, the Soft Drinks Industry Levy (known generally as the Sugar Tax) is designed to persuade manufacturers to reduce the amount of sugar in carbonated drinks like Persi Cola. The aim is to reduce obesity in the UK population.

Critics often refer to the "nanny state" and "sin taxes". It is a fact that many people consume sugary products, especially drinks, to provide energy which is not available from artificial sweeteners. Also we don't all have a high weight problem and some of us actually need to increase our weight. Please go to https://www.gov.uk/government/news/soft-drinks-industry-levy-comes-into-effect for a full explanation of how the tax works. There are 1,000 ml in a litre, which is about 35 fluid ounces or 10% larger than two US pints.

Being high in sugar meant that Pepsi Cola attracted the highest rate of Sugar Tax at 48p per two litre bottle. They have just reduced the sugar content by 58% which brings them below the threshold. The sweetness is retained by replacing the lost sugar (a natural substance) by artificial compounds.

The Sugar Tax is no doubt well intentioned, but it is arguable whether replacing a natural ingredient with artificial ones is more healthy. People will disagree about the change in taste, but the forum I visited was very critical, e.g. "If I wanted something that tasted like Diet Pepsi, I'd buy Diet Pepsi!"

Finally, if you continue to buy regular Pepsi Cola, do keep an eye on the price. If it hasn't dropped by at least 24p per litre, someone is profiteering from the reformulation.

(02/07/2023)

[weldonwulstein]

What Is Corporate Tax?

Corporate tax, also known as corporation tax or company income tax, is a tax levied by the federal or state government on business profits. In the United States, corporations' profits are subject to a tax rate of 21 percent.

Corporation tax is imposed on a company's taxable income, which is the revenue after all necessary expenses have been deducted. The expenses here include the cost of goods sold, research and development expenses, general and administrative expenses, depreciation, and all other operating expenses of the company. Various countries have various corporate tax rates. Some countries are known for having very low rates and are called tax havens because of this.

Corporate income and capital gains are two common types of corporate tax. Corporate income tax is usually levied on a company's net profits. The rates for corporate income tax can vary significantly from country to country. Within the United States, corporate income tax might vary from state to state. So, businesses need to be aware of the specific rates that apply to them based on where they are located. Capital gains tax applies when corporations sell assets like real estate, stocks, or other investments for a profit. This tax is usually separate from the regular corporate income tax and may be subject to different rates depending on the asset and its length of ownership.

Companies often pay less than the official tax rate due to available deductions, government incentives, and legal tax gaps. These factors reduce the actual tax rate companies pay compared to the nominal rate set before adjustments. Before 2017, the US corporate income tax rate was 35 percent, but after the Tax Cuts and Jobs Act (TCJA) was signed into law by former President Donald Trump in 2017 and was affected in 2018, the current federal voltage tax rate in the United States has now been pegged to a flat 21 percent rate.

One major reason for corporate tax is that it serves as a source of revenue for governments worldwide. Although corporate tax rates have been experiencing a downward turn worldwide over the last twenty years, corporate tax continues to be a key revenue source for the government, especially in developing nations. In certain nations across Africa, Asia, and the Pacific, over 25 percent of their overall tax income is derived from corporate taxes.

In addition to generating revenue for the government, corporate tax is essential for limiting wealth accumulation and promoting an equitable sharing of the tax load across both individuals and companies. Governments often use corporate tax policies to guide how businesses behave in the economy. For instance, they might offer tax breaks to companies that invest in areas like renewable energy, new technologies, or infrastructure. On the flip side, they can impose higher taxes on industries like fossil fuels to discourage activities that harm the environment or public health. These strategies not only help steer the economy in the right direction but also encourage businesses to align with broader goals like sustainability and social responsibility.

Lastly, corporate tax also ensures fairness when it comes to taxes for businesses. The main idea behind corporate tax is to ensure that each company contributes an appropriate share in taxes, ensuring that the responsibility of paying taxes is shared equitably.

[eaglesnick]

“It seems the most logical thing in the world to believe that the natural resources of the Earth, upon which the race depends for food, clothing and shelter, should be owned collectively by the race instead of being the private property of a few social parasites.

— Ralph Chaplin

While more and more homes in Britain suffer severe flooding because of climate change, Rishi Sunak has decided that North Sea oil and gas extraction should be speeded up.

“Hundreds of new North Sea oil and gas licences to boost British energy independence and grow the economy. ”  (GOV.UK: 31/07/23)

This policy has now been confirmed and will be included in the king’s speech. More concerned with winning votes than the catastrophic effects of climate change:

“Sunak has already watered down the government’s climate targets, pushing back the deadline for selling new petrol and diesel cars and the phasing out of gas boilers, prompting furious condemnation from the automobile and energy industries.” (Guardian:05/11/23)

The excuse used by Sunak to justify his planned increase in fossil fuel production  is "to reduce emissions and boost UK energy independence."

These claims are simply not true.

Encouraging more oil and gas production does not reduce emissions - it increases them. If you expand the global market for fossil fuels then more will be used with the obvious accompanying increase in emissions. What is more, Rystad Energy, an independent advisory and business intelligence company, has stated that:

“ UK oil rigs are among the highest carbon emitters in Europe. CO2 emissions released into the atmosphere from extracting North Sea oil and gas reached 13.1MM metric tonnes in the UK in 2019, or 21kg of carbon dioxide for every barrel of oil produced – far greater than the Norwegian North Sea, which produced 4MM metric tonnes of CO2 in 2019, or 8kg of CO2 a barrel.”  (Guardian: 13/10/22)

But let us put this evidence aside for the moment and give Sunak the benefit of the doubt regarding emissions, and look at his other claim that increase extraction of gas and oil from the North Sea will “boost UK energy dependency".

Again, simply not true. It was reported only a few weeks ago that the UK EXPORTS 80% of North Sea oil which is processed abroad and then sold back to us at whatever international price makes the oil and gas industries the most profit. (CNN Business: 27/09/23)

The only way to secure energy independence is to have state ownership of our natural assets. But that is not The Tory way.

Unlike the Norwegian government, who invested their countries enormous oil and gas revenues in economic sectors across the world, creating a State owned sovereign wealth fund now worth $1.2 trillion in assets, our Tory government squandered the money, continues to allow private investors to reap the profits, and have refused to create a UK Sovereign Wealth Fund because they are ideologically opposed to public ownership.

While Sunak is forced to sell licenses for oil and gas extraction in order to secure at least some  benefits from our natural resources, the Norwegians impose  a 78% tax levy on private oil and gas companies.

“UK should match Norway’s 78% North Sea oil and gas tax, thinktank says.” (guardian:28/10/22)

But that isn’t going to happen. Instead, our ideologically driven Tory government, opposed to taxes of any kind and especially those aimed at the rich and corporate world continue to draw  headlines like these.

“Shell and BP paid zero tax on North Sea gas and oil for three years.” (Guardian: 30/10/22)

and

“North Sea oil and gas industry offered ‘get-out’ clause on windfall tax.”(Guardian:09/06/23)

The stark contrast between the way successive Tory Government’s in the UK have managed the “bonanza” of North Seal oil and gas and the way the more socialist Norwegian governments have utilised their natural resources couldn’t be more stark.

[sepblogs1211]

Trump Tariffs Impact Global Markets: Gold, Dollar, and Currencies

MARKET OVERVIEW

On February 2, 2025, President Trump imposed tariffs on imports from Canada, Mexico, and China, set to take effect on February 4. The tariffs include a 25% levy on most goods from Canada and Mexico, along with a 10% tariff on energy products from Canada and various imports from China. In retaliation, Canadian Prime Minister Trudeau and Mexican President Sheinbaum announced equivalent tariffs on U.S. imports. This has sparked fears of a trade war, impacting global markets.

Gold and the Dollar: Market Shifts

Gold, having reached a record high of 2817.100, faced a pullback below 2789.390, testing key support levels like the EMA200. Despite this, we maintain a bullish outlook, expecting further upside. However, the dollar’s surge due to tariff concerns poses a challenge to gold’s rally. Quantitative forex models indicate that the market is adjusting to these tariff measures, with the U.S. dollar gaining strength. The regulated MetaTrader platforms reflect this shift as the MACD shows increasing volume, and RSI suggests continued selling pressure. Nonetheless, institutional investors are likely to hedge against dollar risks by increasing gold positions.

Silver: Risk-Hedging in Action

Silver is expected to remain subdued until gold reaches new highs. The compounding forex profits approach can be applied here, as market conditions indicate further buying potential once gold pushes higher. The MACD suggests continued downward pressure, but banks may shift to silver as a safe haven in case gold hits $3,000 per ounce.

DXY and the Dollar’s Rise

The DXY index surged after Trump’s announcement, strengthening the dollar. The tariffs have fueled inflationary pressures, increasing the dollar's appeal. Hedging with multiple currencies has become a common strategy for investors managing the risk of a strong dollar. The MACD and RSI both show strong buying momentum, signaling further strength in the U.S. dollar.

Currency Pairs: USD and Beyond

GBPUSD: The pound is consolidating despite dollar strength. The MACD and RSI indicate downside momentum, signaling potential for further declines.

AUDUSD: The Australian dollar has seen sharp drops against the dollar, consistent with global inflationary pressures. Forex scalping automation may present opportunities to capitalize on these drops.

NZDUSD: While growth is evident in some markets, traders should avoid chasing moves without solid strategy. The expectation is that the dollar will continue to push prices lower due to tariff effects.

EURUSD: The Euro is holding up better than most, but selling pressure remains. The market shows potential for re-entry into short positions once price gaps are filled.

USDJPY: The yen failed to break key levels, shifting to a more bullish bias. The growing momentum is reflected in both the MACD and RSI, suggesting further strength for the yen.

USDCHF: The Swiss Franc has shown stability, continuing to rise with increasing buying momentum. Traders are advised to wait for pullbacks before entering positions.

USDCAD: The Canadian dollar is seeing significant buying pressure, impacted by the tariffs. It is expected to continue its rally with little resistance. Traders can maintain long positions, utilizing compounding forex profits strategies to maximize returns.

COT REPORT ANALYSIS

AUD - WEAK (5/5)

GBP - WEAK (4/5)

CAD - WEAK (4/5)

EUR - WEAK (4/5)

JPY - WEAK (1/5)

CHF - WEAK (5/5)

USD - STRONG (4/5)

NZD - WEAK (4/5)

GOLD - STRONG (5/5)

SILVER - STRONG (4/5)

[mariacallous]

At the end of 2022, Dmitry Medvedev—Russia’s former prime minister and the current deputy chairman of its Security Council—offered his predictions for the coming year. He warned that Europeans would suffer badly from Russia’s decision to curb natural gas exports to the European Union, suggesting that gas prices would jump to $5,000 per thousand cubic meters in 2023—around 50 times their prewar average. He probably assumed that that sky-high prices would translate into a windfall for Russian state-owned energy company Gazprom, which was still supplying several European countries via pipeline, ramping up exports of liquefied natural gas, and eyeing new deals with China. Perhaps Medvedev also hoped that Europeans would beg the Kremlin to send the gas flowing again.

It turns out that Medvedev might want to polish his crystal ball: Last year, European gas prices averaged a mere one-tenth of his number. And just this month, Gazprom posted a massive $6.8 billion loss for 2023, the first since 1999.

Gazprom’s losses demonstrate the extent to which the Kremlin’s decision to turn off the gas tap to Europe in 2022 has backfired. In 2023, European Union imports of Russian gas were at their lowest level since the early 1970s, with Russian supplies making up only 8 percent of EU gas imports, down from 40 percent in 2021. This has translated into vertiginous losses for Gazprom, with the firm’s revenues from foreign sales plunging by two-thirds in 2023.

Gazprom’s woes are very likely setting off alarm bells in Moscow: With no good options for the company to revive flagging gas sales, its losses could weigh on Russia’s ability to finance the war in Ukraine. This is especially ironic given the fact that EU sanctions do not target Russian gas exports; the damage to the Kremlin and its war effort is entirely self-inflicted.

The most immediate impact of Gazprom’s losses will be on Russian government revenues, a crucial metric to gauge Moscow’s ability to sustain its war against Ukraine. Poring over Gazprom’s latest financials paints a striking picture. Excluding dividends, Gazprom transferred at least $40 billion into Russian state coffers in 2022, either to the general government budget or the National Welfare Fund (NWF), Moscow’s sovereign wealth fund.

This is no small feat. Until last year, Gazprom alone provided about 10 percent of Russian federal budget revenues through customs and excise duties as well as profit taxes. (Oil receipts usually account for an additional 30 percent of budget revenues.) This flood of money now looks like distant history. In 2023, the company’s contribution to state coffers through customs and excise duties was slashed by four-fifths, and like many money-losing firms, it is due a tax refund from the Russian treasury.

For Moscow, this is bad news on several fronts. Because of rising military expenses, the country’s fiscal balance swung into deficit when Moscow invaded Ukraine. To help plug the gap, the Kremlin ordered Gazprom to pay a $500 million monthly levy to the state until 2025. Now that the company is posting losses, it is unclear how it will be able to afford this transfer. In addition, Gazprom’s contribution to the NWF will probably have to shrink. For the Kremlin, this could not come at a worst time: The NWF’s liquid holdings have already dropped by nearly $60 billion, around half of its prewar total, as Moscow drains its rainy-day fund to finance the war. Finally, Gazprom’s woes could prompt the firm to shrink its planned investments in gas fields and pipelines—a decision that would, in turn, hit Russian GDP growth.

As if this was not enough, a closer look at Gazprom’s newly released financials suggests that the worst may be yet to come, with three telltale signs that 2024 could be even more difficult than 2023.

First, Gazprom’s accounts receivable—a measure of money due to be paid by customers—are in free fall, suggesting that the firm’s revenue inflow is drying up. Second, accounts payable shot up by around 50 percent in 2023, hinting that Gazprom is struggling to pay its own bills to various suppliers. Finally, short-term borrowing nearly doubled last year as Russian state-owned banks were enlisted to support the former gas giant.

Whereas these figures come from Gazprom’s English-language financials, the company’s latest Russian-language update yields two additional surprises—both of which show that the firm’s situation has worsened even further since the beginning of the year.

First, short-term borrowing during the first three months of 2024 roughly doubled compared to the previous quarter. If Russian state-owned banks continue to cover Gazprom’s losses, the Russian financial sector could soon find itself in trouble. This begs a tricky question: With the NWF’s reserves dwindling and Moscow’s access to international capital markets shut down, who would pay a bailout bill? Second, Gazprom’s losses were almost five times greater in the first quarter of 2024 than in the same period of 2023, hinting that the firm may post an even bigger loss this year than it did in 2023.

Looking ahead, 2025 will be an especially tough year for Gazprom. The transit deal that protects gas shipments through Ukraine via pipeline to Austria, Hungary, and Slovakia will probably expire at the end of this year, further curbing what’s left of Gazprom’s exports to Europe. A quick glance at a map makes it clear that China is now the only remaining option for Russian pipeline gas.

Yet Beijing is not that interested: Last year, it bought just 23 billion cubic meters of Russian gas, a mere fraction of the 180 billion cubic meters that Moscow used to ship to Europe. Negotiations to build the Power of Siberia 2 pipeline, which would boost gas shipments to China, have stalled. And in truth, China is not a like-for-like replacement for Gazprom’s lost European consumers. Beijing pays 20 percent less for Russian gas than the remaining EU customers, and the gap is predicted to widen to 28 percent through 2027.

Without pipelines, raising exports of liquefied natural gas (LNG) is the only remaining option for Moscow. However, Western policies make this easier said than done. Western export controls curb Russia’s access to the complex machinery needed to develop LNG terminals, such as equipment to chill the gas to negative160 degrees Celsius so that it can be shipped on specialized vessels. And Washington has recently imposed sanctions on a Singapore-based firm and two ships working on a Russian LNG project, signaling that it will similarly designate any entity willing to work in the sector. Finally, U.S. sanctions make it much harder for Russian firms to finance the development of new liquefaction facilities and the gas field designed to supply them. In December, Japanese firm Mitsui announced that it was pulling staff and reviewing options for its participation to Russia’s flagship Arctic LNG 2 project. As a result, the Russian operator announced last month that it was suspending operations of the project, which was originally slated to launch LNG shipments early this year.

Gazprom’s cheesy corporate slogan—“Dreams come true!”—does not ring so true anymore as Moscow’s former cash cow becomes a loss-making drain. Data from the International Energy Agency confirms the extent of the Kremlin’s miscalculation when it turned off the gas tap to Europe: The agency predicts that Russia’s share of global gas exports will fall to 15 percent by 2030—down from 30 percent before Moscow’s full-blown invasion of Ukraine.

This was probably predictable. It is hard to imagine how a gas exporter configured to serve European customers and reliant on Western technology could thrive after refusing to serve its main client—signaling to every other potential customer, including China, that it is an unreliable supplier. Corporate empires tend to rise and fall, and it looks like Gazprom will be no exception to the rule.

[accapitalmarket]

Hawkish Fed Left Rates Unchanged, Wall Street Lower

US stocks were weak on Wednesday after the Federal Reserve made a hawkish shift on inflation when it, as expected, left interest rates unchanged at their first meeting of 2025.

In their policy statement, Fed officials commented that inflation continues to be somewhat elevated, and the reference to inflation making progress towards their 2% target was removed.

The removal of the reference could indicate a shift in the Fed's approach to inflation, and, following the statement, traders cut their expectations for easing from the Fed this year.

The inflation picture is further complicated by potential pressures stemming from President Trump’s proposed tariffs and protectionist policies. The Fed's shift also comes hot on the heels of Trump's virtual address to the World Economic Forum in Davos last week where he called for immediate rate cuts.

On foreign exchanges, the US dollar firmed against major currencies as the Fed gave few clues about further reductions in borrowing costs this year.

Meanwhile, on the data front, the US goods trade deficit surged to $122.1 billion in December, up from $103.5 billion the preceding month and well above the consensus forecast of $105.5 billion.

At the stock market close in New York, the Dow Jones Industrials Average was down 0.3% at 44,713, while the broader S&P 500 index lost 0.5% at 6,039, and the tech-laden Nasdaq Composite fell 0.5% to 19,632.

US30Roll H4

Some of the biggest tech industry players are posting earnings this week. Microsoft fell 7.3% in after-hours trading as although the software giant's fiscal second-quarter results beat Wall Street estimates, growth in its key Azure cloud business fell short of expectations.

Tesla shed 2.2 % as it reported below-forecast fourth-quarter revenues, as slowing demand weighed on the electric vehicle maker’s top line, although profit rose slightly.

But Meta Platforms rose 0.3% after-hours as the Facebook firm posted record revenue in the fourth quarter, aided by AI improvements to its advertising business.

And IBM gained 8.5% in extended trading after its fourth-quarter profit surpassed analysts' estimate, driven by demand in its high-margin software unit as businesses ramped up IT spending.

Ahead of its earnings due after-hours on Thursday, Apple rose 0.5% during the day’s session despite being downgraded to perform from outperform by analysts at Oppenheimer.

Elsewhere, NVIDIA shed 4.1%, reversing Tuesday’s rally, as investors continued to assess the impact of DeepSeek's new model on the AI chip giant's future prospects.

Away from tech, Levi Strauss fell 6.6% in extended trading as the clothing firm forecast annual profit well below analysts' estimates after topping fourth-quarter revenue.

T-Mobile US gained 6.3% after the telecom giant forecast annual wireless subscriber growth above expectations, after holiday-quarter promotions and deals boosted demand for its affordable premium 5G plans with streaming bundles.

Starbucks jumped 8.1% after the world’s largest coffee chain reported better-than-expected first quarter sales as some of its turnaround efforts start to deliver results.

And Trump Media & Technology rose 6.8% after the Truth Social parent company announced that it is expanding into financial services, including investment products.

Among commodities, oil prices fell on Wednesday, after domestic crude stockpiles rose by 3.46 million barrels last week, according to Energy Information Administration data, higher than the 3.19-million-barrel increase.

USOILRoll Daily

US WTI crude fell 1.0% to $73.01 a barrel, while UK Brent crude lost 0.8% at $76.85 a barrel.

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