Crude joke on American taxpayers - we will pay

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/06/26/INFM1E32VD.DTL#ixzz0s0nNMMc4

Crude joke on American taxpayers - we will pay
Rodney P. Mock,Arline Savage

Sunday, June 27, 2010

As the nation remains engrossed - and disgusted - by plumes of oil gushing from BP's wellhead on the ocean floor in the Gulf of Mexico, the Alaskan Exxon Valdez spill of the 1980s comes to mind. Similar to that experience, we will see everyone from federal and local governments to private landowners and local businesses filing lawsuits against BP. But what the public may not know is that it may end up footing a good portion of BP's legal damages, fees and costs because they are tax deductible.


History tells the tale. After long battles with the federal government and the State of Alaska, Exxon eventually settled for a reported $1.15 billion (of which $125 million was forgiven in recognition of that company's cooperation). But the reality, according to the Congressional Research Service, is that the after-tax cost to Exxon was $524 million, and more than half of the $900 million in civil damages it paid were also tax deductible. In other words, taxpayers picked up much of the bill.

The same slippery tax secret is at issue with BP. Thanks to a commonly used provision in the Internal Revenue Code, the oil company may be able to deduct many of the settlements and judgments against it as "ordinary and necessary" business expenditures. These deductions result in fewer taxes paid and, for a corporation like BP, the after-tax savings are as high as 35 percent, excluding any state and local income tax savings. Worse, these deductions can be carried back two years and forward 20 years to more profitable times.

What constitutes an "ordinary and necessary" business expense was intentionally left undefined by Congress, because listing all these expenses (e.g., rent, salaries, utilities) would be too lengthy and cumbersome. The lack of a formal list has created some confusion about what deductions qualify, and generally speaking, the courts have been liberal in interpreting the rule. As a result, companies have deducted as business expenses everything from judgments for patent infringement to settlements relating to antitrust disputes. Legal and accounting fees are also often deductible if the lawsuit arises in the ordinary course of business. And even claims resulting from a violation of state or federal law are able to be deducted as long as they are sufficiently connected to a business' operations. So, as unbelievable as it is, negligence, fraud and a host of other misdeeds may be deductible, as are punitive damages assessed for wrongdoings.



Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/06/26/INFM1E32VD.DTL#ixzz0s79OLMY8

with a recommend of my own.

Their mental state only allows them to see 'privilege' as something earned (not really, to them poor people should just die) by poor people, maybe the middle class when it dies off can apply for 'privilege' insurance. They (ruling elite) OTOH get to live lavish lives at the taxpayer dollar and all they have to do is stay elected (by beating the other millionaire).

I do not think those are deductible
And fine the execs personally

banned from operating here for at least 10 years.

We already know who will pay, it's the entire ecosystem and all of us that will pay!

This is real information.

:eyes:

You're pathetic.

A person speculates that people may be unreccing the thread because they think it may reflect poorly on the administration, and your response is to claim that the other poster said that "Obama's to blame for loopholes in the tax code?"

That kinda proves that the other poster's speculation has some merit, doesn't it?

for the $20 billion escrow fund. It saves BP money. Money they can pay taxes on.

but it certainly was not the woodshed moment some portrayed.

going to claimants now rather than $35 billion much later with 40% going to class-action lawyers. Republicans would call that tort reform. Except of course it was a Democrat's idea so it's a "shakedown".

the real winners in all this

To find out the public will be paying for some of BP's screwup..

the ocean. He maintains that that's the reason why they aren't making any other serious efforts to cap the well; their liability is already limited, and they can claim every last drop of leaked oil as a loss, and therefore receive a tax deduction on it. I don't know if there is any truth to that, but it IS somewhat amazing that no other serious efforts by anyone have been made to stop the gusher.

I hope enough people are sickened. We better take our power back and hold these people accountable RIGHT NOW, and not be lulled for the promise of some blame game litigation in the future.

Energy giant BP PLC will donate proceeds raised by selling oil from the leaking well in the Gulf of Mexico to the National Fish and Wildlife Foundation.

They said 'proceeds'. Not all or not some.

They've been lying since day 1 about this whole affair
There is no reason to believe them now.

BP will be fully reimbursed for this disaster through tax breaks and subsidies.

:nuke:

I once read that the IRS had ruled in one case that BRIBES were deductible. Whether it applies to all corporate bribes, I don't know.

"The only part of the national wealth that enters into the collective possession of modern peoples is their national debt"
-Karl Marx

"Those at the top take away our timberlands, oil reserves, mineral deposits, pension funds, airwaves and jobs, but the national debt will remain safely ours"
-Michael Parenti

Same as it ever was.
The costs will eventually be shifted to the taxpayer.

The laws, tax codes and industry regulations were written by the oil companies in the first place.
What other outcome is possible?

:hi: