Wednesday, July 28, 2010

BP - Tax Deductions to Contribute to Paying for Oil Mess

Wonder how BP is going to pay for the $32 billion it estimates the gulf oil spill, cleanup and compensation will cost the company? Think they are simply going to pay up and move on? Oh no, they are going to make sure they come out even on the deal and don't take the hit to their bottom line.

How are they going to do that?

Well, part of their answer is to deduct $10 billion of the cost from their U.S. taxes.

Yep. A third of the expendatures they're laying out they are going to recoup by not paying taxes.

I'm not saying that this is illegal or anything, and I understand that BP is committing the $32 billion. But, I bring this up because I think this maneuver again shows you the nature and motivation of big business. In this case, a company is ready and willing to deduct the cost of a disaster it caused from their taxes to help pay for it's cleanup...depriving the U.S. public of funds that in a more equitable situation it should in receive as compensation for this mess.

Oh, and how will BP make up the rest of the $32 billion so they don't go into the black? It appears they will sell off certain elements of their business to raise the funds. This certainly makes sense, but the thing that is interesting to me is even after doing that, BP will STILL be the second biggest oil company in the world. This is a massive, massive international company. Is it any wonder they have so much influence on our government, its policies and energy regulation?

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