From: ShunkW <shunkw@sbcglobal.net>
Date: Tue, Jul 6, 2010 at 1:40 AM
Subject: Oil Companies, Including BP and Transocean, Reap Big Tax Breaks
To: ShunkW <shunkw@sbcglobal.net>
Oil Companies, Including BP and Transocean, Reap Big Tax Breaks
Politics Daily Staff
Posted:
07/4/10
Oil companies like BP and Transocean, the company that owned the Deepwater Horizon rig in the Gulf of Mexico, reap about $4 billion a year in tax breaks by taking advantage of provisions in U.S. laws "available at virtually every stage of the exploration and extraction process," according to the New York Times.
Transocean has been ably to significantly reduce its taxes by moving its headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland two years ago. It also reduced the taxes it paid by registering the Deepwater Horizon under the flag of the Marshall Islands.
BP realized big tax benefits by using a break that allowed it to deduct 70 percent of the rent it paid to Transocean for the use of Deepwater Horizon, according to the story.
The Times said the oil ndustry is lining up to oppose a proposal under consideration by federal officials to impose a new tax on it to help pay for the Gulf clean-up.
Industry officials say that such a tax will cost jobs and push up the price of gasoline. They also argue that the subsidies they receive are a bargain for taxpayers because they help companies weather market fluctuations and invest in new technology.
That argument is rejected by Sen. Robert Menendez, (D-N.J.), who is seeking to cut back the tax breaks. Menendez told the Times, ""The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant.There is no reason for these corporations to shortchange the American taxpayer."
Senate Finance Committee Chairman Max Baucus (D-Mont.), said this week his panel would look into whether Transocean had exploited loopholes in U.S. tax law by moving its headquarters overseas, the Associated Press reported last week.
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