You probably know the oil industry gets a lot of subsidies. But you may not know that, according to the New York Times,
an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.
For example, by leasing the oil rig that caused the disaster, BP
used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon — a deduction of more than $225,000 a day since the lease began.
Another great scam:
Because of one lingering provision from the Tariff Act of 1913, many small and midsize oil companies based in the United States can claim deductions for the lost value of tapped oil fields far beyond the amount the companies actually paid for the oil rights.
Overall,
According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.And for many small and midsize oil companies, the tax on capital investments is so low that it is more than eliminated by various credits. These companies’ returns on those investments are often higher after taxes than before.
On top of that, rig owners drill for oil in American shores while flying the flag of another country and putting the headquarters overseas, all to radically cut their taxes.
I’m sure any day now conservatives — especially those rabidly free-market Texas conservatives — will put an end to this corporate socialism.
