BP used oil industry tax break to write off its rent for Deepwater rig.
Posted in Main Blog (All Posts) on July 5th, 2010 4:40 am by HL
BP used oil industry tax break to write off its rent for Deepwater rig.
Transocean, the company that owns the failed Deepwater Horizon rig that caused the Gulf oil spill, used well-known tax havens in the Cayman Islands and Switzerland to lower its U.S. corporate tax rate by almost 15 points. And due to a break in the U.S. tax code, BP was also allowed to write off the […]
Transocean, the company that owns the failed Deepwater Horizon rig that caused the Gulf oil spill, used well-known tax havens in the Cayman Islands and Switzerland to lower its U.S. corporate tax rate by almost 15 points. And due to a break in the U.S. tax code, BP was also allowed to write off the rent it paid to Transocean on its own tax bill, saving it hundreds of thousands of dollars per day:
The owner, Transocean, moved its corporate headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland in 2008, maneuvers that also helped it avoid taxes. At the same time, BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company 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.
So, essentially, the U.S. taxpayer paid BP to lease a rig that was incorporated in a foreign country for the purpose of avoiding the U.S. corporate tax. And the U.S. tax code is actually riddled with breaks for the oil industry, despite that industry’s record profits in recent years. Center for American Progress Senior Policy Analyst Sima Gandhi has counted nine different subsidies that the U.S. government gives to the oil industry, including refunds for drilling costs and refunds to cover the cost of searching for oil. If this corporate welfare were cut, it would save $45 billion per year, and according to the Office of Economic Policy at the Department of Treasury, “affect domestic production by less than one-half of 1 percent.” “The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant,” said Sen. Robert Menendez (D-NJ). “There is no reason for these corporations to shortchange the American taxpayer.”
No Dissent Allowed: Leading Conservatives Call For Steele To Resign For Daring To Question War
This past Friday, video surfaced of RNC Chairman Michael Steele speaking at a fundraiser in Connecticut about the war in Afghanistan. While some of Steele’s comments at the fundraiser were clearly inaccurate — such as his claim that the war was of “Obama’s choosing,” when it was started by his predecessor — he […]
This past Friday, video surfaced of RNC Chairman Michael Steele speaking at a fundraiser in Connecticut about the war in Afghanistan. While some of Steele’s comments at the fundraiser were clearly inaccurate — such as his claim that the war was of “Obama’s choosing,” when it was started by his predecessor — he also made reasonable, debate-worthy arguments that engaging in a prolonged land war in Afghanistan is unwise.
Rather than refuting the historical inaccuracies in the first half of Steele’s statements and thoughtfully considering his critique of the war, numerous leading conservatives have responded to Steele’s comments by lashing out at the chairman, with some even asking for him to step down from his post. Their message is clear — in the modern Republican Party, you are not allowed to question the wisdom of engaging in a war:
– Leading conservative pundit and McCain presidential campaign advisor Bill Kristol called Steele’s comments an “affront…to the commitment of our soldiers” in Afghanistan and demanded that the chairman step down. [7/2/10]
– RedState founder, leading movement conservative, and CNN contributor Erick Erickson said that Steele “has lost all moral authority” and he “must resign.” [7/2/10]
– Rep. Tom Cole (R-OK), former chairman of the National Republican Congressional Committee, said Steele’s remarks were “totally unacceptable” and said that he should “apologize and resign.” [7/03/10]
– Former Bush State Department official and Keep America Safe founder Liz Cheney said that Steele’s Afghanistan comments were “deeply disappointing and wrong” and that it is “time for Steele to step down.” [7/4/10]
– This morning on ABC’s This Week, Sen. John McCain (R-AZ) said there was “no excuse” for Steele’s comments and told host Jake Tapper that “Mr. Steele is going to have to assess as to whether he can still lead the Republican Party as chairman of the Republican National Committee.” [7/4/10]
– Speaking on Fox News Sunday today, Sen. Jim DeMint (R-SC) demanded that Steele “apologize to our military” and said that Republicans “need a chairman who’s focused.” [7/4/10]
– On CBS’s Face The Nation, Sen. Lindsey Graham (R-SC) called Steele’s remarks “unwise” and said “we must win this war.” The senator was thankful, however, that Steele was “backtracking so fast he’s gonna be here fighting in Kabul soon.” [7/4/10]
While leading conservatives may be fine with toppling the head of their party for daring to question the wisdom of a long and protracted war in Afghanistan, they risk marginalizing themselves politically among an American public that is increasingly opposed to America’s longest war in history. A recent USA Today/Gallup poll found that a whopping 58 percent of Americans agree with President Obama’s stated timeline of July 2011 to begin withdrawal from Afghanistan.
It is also worth noting that nine elected Republicans in the U.S. House of Representatives voted in favor of the McGovern-Obey amendment requiring President Obama to submit a timeline for withdrawal from Afghanistan — indicating that Steele’s position may be an increasingly popular one in the Republican Party.
