Daniel Kocieniewski reports in the NY Times on how the US oil industry is using tax havens to avoid repaying the community for the privilege of mining the earth for all it’s worth.
Kocieniewski reports that the oil and natural gas industry has spent US $340 million on lobbyists since 2008 for a $4 billion annual saving in tax liabilities. An investment of just 2.8% of the sum subsidy reflects for how cheaply our democracy has been sold off. If we also added the lost economic rents to this $12bn total, the investment return on lobbyists would be astronomical.
The recent ousting of Kevin Rudd from office was undoubtedly linked to his determination for the public to capture some of the mining rents Daniel’s excellent piece:
WHEN the Deepwater Horizon drilling platform set off the worst oil spill in American history, it was flying the flag of the Marshall Islands. Registering there allowed the rig’s owner to reduce significantly its American taxes.
The owner, Transocean, moved its corporate headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland in 2008, manoeuvres that also helped it avoid taxes.
At the same time, BP was reaping sizeable tax benefits from leasing the rig. According to a letter sent in June to a US Senate committee, the company used a tax break for the oil industry to write off 70 per cent of the rent for Deepwater Horizon – a deduction of more than $US225,000 a day since the lease began.
With US officials considering a new tax on petroleum production to pay for the clean-up, the industry is fighting the measure, warning it will lead to job losses and higher petrol prices, and a greater dependence on foreign oil.
But an examination of the American tax code indicates that oil production is among the most heavily subsidised businesses, with tax breaks available at virtually every stage of the exploration and extraction process.