Replies to post #24994 on Plug Power Inc (PLUG)

[uksausage]

So what rate was Walmarts "subsidy" it certainly isn't 30%.

as you state here:

In contrast, tax credits directly reduce a person’s tax liability and hence have the same value for all taxpayers with tax liability at least equal to the credit.

so assume they invest $1m on PLUG fuel cells they will get a tax credit of $300,000 (I know there are all sorts of limits etc but the basic fundamentals are what matters)

So their overall earnings subject to tax will be reduced by $300,000 and assume they pay corporation tax at say 25% that means they will pay $75,000 less tax

Hence your subsidy is only $75,000 not the $300,000 or put in terms of the deal you get a subsidy of 7.5% not 30%