Wednesday, July 07, 2010
(book by Mark Zepezauer)
Oil industry lobbyists are decrying a proposed new tax on the industry to pay for the cleanup of the Gulf of Mexico disaster—while at the same time their clients reap huge subsidies from the federal government.
An investigation by The New York Times led to the conclusion that the oil industry is “among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.”
For instance, BP was able to write off 70% of the cost of leasing the Deepwater Horizon oil platform from owner Transocean.
A report by the Congressional Budget Office from 2005 showed the industry pays about 9% tax on oil field leases and drilling equipment—“significantly lower than the overall rate of 25% for businesses in general and lower than virtually any other industry, wrote The New York Times.
Total tax breaks for the oil industry average $4 billion a year.
-Noel Brinkerhoff
As Oil Industry Fights a Tax, It Reaps Subsidies (by David Kocieniewski, New York Times)
Taxing Capital Income: Effective Rates and Approaches to Reform (Congressional Budget Office) (pdf)
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