Sunday, July 4, 2010
How To Save $45 Billion Dollars Per Year
BP used oil industry tax break to write off its rent for Deepwater rig
Tranocean, the owner of the rig the BP blew up in the gulf, uses well-known tax havens in the Cayman Islands and Switzerland to lower its U.S. corporate tax rate by almost 15 points. Furthermore, the US tax code allows BP to write-off the rental payment saving BP hundreds of thousands of dollars per day. 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.
There are nine different subsides that we give the oil companies. NINE. We can't help unemployed Americans, but we can provide corporate welfare for oil corporations -- highly profitable oil corporations.
We could save $45 billion dollars per year if we eliminated these subsidies. That's almost half a TRILLION dollars over 10 years -- half the cost of the health care bill.
But wait, you say. We can't eliminate the oil corporation welfare. They will stop producing oil. They will stop drilling. They will stop exploring.
Well, you know what? It will affect domestic oil production. It will affect it by less than one-half of one percent.