$20 Billion Fund is Tax Deductible For BP

That's right, any corporate loss, even if due to criminal negligence, is tax deductible.

So, for about every $20 billion, BP gets about a $4 billion tax decuction, according to Ronnie Deutch on CNN just moments ago.

WASHINGTON - THE good news for BP: it will probably be able to write off some or all of a new US$20 billion (S$27.8 billion) oil spill escrow fund from its taxes.

(snip)

Tax experts say it would be natural for BP to deduct the costs paid out under the fund. Indeed, they have a duty to shareholders to maximise the firm's value.

'Corporations have liabilities all the time for damages and they are deductible either as a loss or a business expense; it happens all the time,' said Walker Johnson, partner at Steptoe & Johnson in Washington, DC.

Exxon did the same thing after its oil disaster over two decades ago but was criticised for it. The final costs to Exxon shareholders from the 1989 Exxon Valdez tanker disaster were less than the headline cleanup figures, as many costs were deductible. -- REUTERS

www.straitstimes.com...

ronideutch.blogspot.com...

Hahaha...of course it it. Someone in another thread was on about how it's the "law" that their liability is limited to $75M or some such number and how Obama blackmailed them into doing even the $20B. Corporations in this weird new form of quasi-socialist plutocracy are helped to mitigate their risks in every way possible, dontcha know?

You know as much as this really grinds my gears....at this point i kind of expected it.


~meathead

Yeah but let's not forget to be eternally grateful and bow down to BP for providing a few jobs.

Hey...let's predict what the U.S. taxpayers burden in all this will be. And the loss of GDP/revenue. I'm going with $150B to start.

[edit on 19-6-2010 by ~Lucidity]

Originally posted by ~Lucidity
Yeah but let's not forget to be eternally grateful and bow down to BP for providing a few jobs.

Hey...let's predict what the U.S. taxpayers burden in all this will be. And the loss of GDP/revenue. I'm going with $150B to start.

[edit on 19-6-2010 by ~Lucidity]

My guess would be in the $1 trillion plus area. Factor in stock loss in 401K, Higher oil prices, Red Lobster losing it's shrimp supply, , the money congress is soaking up with 33 hearings so far, Obama joyriding to the coast 4 times, the National Guard, EPA, lawsuits,

and then we can get to the cleanup costs.

Yes, it is tax deductible.

Please remember, although *financial liability* has been admitted/accepted by BP, *no* criminal activity has been demonstrated much less adjudicated in a court of law.

This is an issue that inspires deep and visceral emotions but we do ourselves a disservice when we forget that there is a *process* and that process is in place in large part to counteract the human propensity to give sway to those oh so human visceral emotions.

IOW: Lynchin' ain't cool folks.

Oh. I have a dumb question. Who got the money from BP for leasing them the rights to drill that site? Wonder how much that was....

reply to post by Geeky_Bubbe


There has to be criminal activity for someone to be held accountable for their actions?

Originally posted by ~Lucidity
Oh. I have a dumb question. Who got the money from BP for leasing them the rights to drill that site? Wonder how much that was....

Paying people $200,000 + a year, with full benefits, is expensive when they spend their time surfing porn, taking oil execs out to dinner, and having sex with them, fudging enviromental reports, signing off safety precautions ex-situ,
...

The Federal Government is completely out of control. If we don't shut them down soon, we'll be rounded up for criticizing them.

Originally posted by ~Lucidity
reply to post by Geeky_Bubbe

 

There has to be criminal activity for someone to be held accountable for their actions?

It depends on what you mean by "accountable."

If you mean suffer economically or physically by force of law: Yes.

If you mean suffer economically by stepping up with a deep pocketed checkbook to fund "making it right" as BP is currently doing, and has been doing since the disaster. No. That's a matter of ethics and BP is exercising their ethical responsibilities.

Now, we could snark about their lack of ethics getting us to the disaster but that's not what I'm referring to here.

A codified punishment, as a rescinding of a tax deduction for expenses because of "x" would be codified, requires Due Process via our courts of law.

reply to post by Geeky_Bubbe


Ah...well I guess in my mind I wasn't taking away the deduction but really just viscerally reacting to the fact that they even have one for that. I wonder if there's a tax law/deduction that would limit my liability too? I don't know much about this, as I'm sure you can tell.

reply to post by Geeky_Bubbe


Yes, according to current tax code, a company may deduct losses, even if they lose the money due to criminal activities.

It's a nice loophole, for corporate/political corruption.

Question is, will they change the code, effectively giving the IRS sweeping powers?

Either way, the common taxpaying citizens get screwed.

The elite will say, yes, I am responsible, all the while knowing full well they will come out fatter, and richer from it, because they all protect each other, even at the expense of the people they supposedly serve.

[edit on 19-6-2010 by OurskiesRpoisoned]

Originally posted by ~Lucidity
Oh. I have a dumb question. Who got the money from BP for leasing them the rights to drill that site? Wonder how much that was....

Prior to the Deepwater Horizon disaster I was not familiar with the Minerals Management Service. This morning I found a video on C-Span.org of a June 17th Congressional hearing of the MMS's role. It's currently running in the background.

Here's a link in case you are as interested in this as I am...

www.c-spanvideo.org...

Jun 17, 2010

House Committee Natural Resources | Energy and Mineral Resources
Witnesses testified about the adequacy of the Minerals Management Service’s regulations for offshore oil and gas operations in light of the Deepwater Horizon explosion. Additionally Kenneth Abbott testified about his allegations about unsafe practices surrounding BP’s deepwater production platform Atlantis.

I'm only about 30 minutes through it so I don't have any information or observations as yet.

[edit on 19/6/10 by Geeky_Bubbe]

Dunno. I'm struggling with this issue just as most are.

However, the thread has me wondering about something:

There are fines and taxes that will be levied by the US Federal government *per barrel* "spilled." Will those be tax deductible? I don't know and wouldn't even know where to look but I would assume/hope that they would not be.

BTW: The Per Barrel fines and taxes are one of the biggest reasons the rate of flow is important. It's important both to the federal government so they know how much taxes and fines to levy and to BP for anticipating future liabilities which they are legally required by the [US] SEC to report on their quarterly and yearly financial statements.

The US government has a vested interest in a *high* rate of flow and of course BP has a vested interested in a *low* or *lower* rate of flow. Either way: There is a vested interest in play.

it's not tax deductable....
it's considered an expense, like labor costs, research and developement, supplies, ect.
the expenses are deducted from the revenues that come in, and that will give you profit.
and it's that profit that is taxed!

Originally posted by dawnstar
it's not tax deductable....
it's considered an expense, like labor costs, research and developement, supplies, ect.
the expenses are deducted from the revenues that come in, and that will give you profit.
and it's that profit that is taxed!

Oh, it will be tax deductible. And we haven't even discussed force majeure yet.

SAN FRANCISCO, June 15 (Reuters) - Transocean Ltd RIGN.S (RIG.N) has rejected a claim of force majeure by Anadarko Petroleum Corp (APC.N) on a deepwater rig in the Gulf of Mexico due to the U.S. deepwater drilling moratorium.

Transocean, with 14 rigs in the Gulf of Mexico, said contracts varied in their treatment of an "actual" force majeure event, and "several customers" had indicated they might declare it, but it was pushing back against this trend.

www.reuters.com...

And then, stock losses will be tax deductible too. Complicated, but explained at this site;
money.cnn.com...

[edit on 19-6-2010 by OurskiesRpoisoned]