The worst environmental disaster in our nation’s history has rightfully cost BP billions of dollars in cleanup costs and restitution to the countless individuals and business affected by BP’s misconduct. Unsurprisingly, BP is seeking to claim a major portion of its historic $20 billion Deepwater Horizon disaster settlement with the states and the Department of Justice as a business expense, which means the company could secure a sizable tax windfall.
Under current law, up to 75 percent of BP’s $20 billion settlement is tax deductible, which could force taxpayers to cover more than $5 billion of the settlement’s costs according to two Congressmen. In response to this potential windfall, Congressmen Eliot Engel (D-NY) and Peter Welch (D-VT) introduced the Offending Oil Polluters Act, or H.R. 3760, in an effort to reform federal tax law that allows companies to deduct restitution, reimbursement or compensatory payments from their corporate taxes as an ordinary business expense. While this bill sits before the House Ways and Means Committee, House Democrats also urged Attorney General Loretta Lynch to prevent BP from claiming the settlement as a business expense.
Many businesses certainly consider potential litigation and settlement costs as possible business expenses. However, allowing a corporate giant like BP to reap a windfall from its misconduct and burden the taxpayers with a hefty portion of the bill is not right. Ordinary citizens should not have to pay for BP’s gross negligence. Hopefully, Congress will make sure that doesn’t happen.
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