Big tax breaks for Big Oil spewing into politcal arena
Big Oil pays little taxes. This according to a weekend New York Times report that dredged up a 2005 analysis by the Congressional Budget Office showing oil leases and equipment are taxed at a rate of 9 percent – far lower than the 25 percent rate for other businesses.
Sen. Robert Menendez, D-N.J., is working with the Obama administration on a bill that would rescind $20 billion in tax breaks for the oil industry, which overall receives about $4 billion in tax breaks each year. And there are other ways to avoid paying taxes.
According to the Times, Transocean, the company that owns the Deepwater Horizon drilling platform that exploded into flames and started the worst oil spill in U.S. history, registered the rig in the Marshall Islands to avoid taxes. The company’s moved its headquarters from Houston to the Cayman Islands and now Switzerland to dodge higher U.S. taxes.
Here in Colorado, Big Oil continues to get sweetheart tax deals, paying one of the lowest severance tax rates among major energy-producing states. BP and other large oil companies spent heavily in 2008 to defeat a ballot initiative to remove property tax exemptions, increase severance taxes and fund higher education in the state.
Tax breaks for Big Oil have become a campaign issue for Democrats battling for Colorado’s U.S. Senate seat, with primary challenger Andrew Romanoff skewering both incumbent Michael Bennet and Mark Udall, who isn’t up for re-election in November, for voting against an amendment that would have done away with $35 billion in breaks.
Both sitting senators said the amendment was poorly crafted and would have punished small oil and gas operators in Colorado along with the BPs and Exxons of the world.