Oil Companies, Including BP and Transocean, Reap Big Tax
Breaks 

Politics Daily Staff 

Posted:07/4/10, politics daily in: reader supported news

http://www.readersupportednews.org/off-site-news-section/69-69/2362-oil-companies-including-bp-and-transocean-reap-big-tax-breaks

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.

Oil rig

The Times said the oil industry 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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