Wednesday, March 28, 2018

The rich ger richer

The oil and gas industry benefitted to the tune of billions of dollars from the Trump tax cut bill... And you didn't.

The Center for Biological Diversity shows how the fossil fuel industry has saved $25 billion so far—"with many more billionaires more to come"—from the Republican tax plan. The new tax code has "supercharged the oil industry." 

The so-called Tax Cut and Jobs Act slashed the corporate tax rate from 35 percent to just 21 percent—a 40 percent reduction—Juhasz explains that "these immediate $25 billion in oil company benefits are primarily the result of companies that had deferred payment of taxes they owe to some point in the future. The more billions of dollars they deferred, the more savings they got from the Tax Act. This is because money that they would previously have been required to pay a tax rate of 35 percent on is now taxed at just 21 percent." Additionally, the Institute on Taxation and Economic Policy, which reviewed filings for 11 of the companies, found that five "will actually receive federal income tax refunds this year" thanks to "newly added and pre-existing loopholes, giveaways, and other advantages" that businesses use to reduce the amount of taxes they pay.

In addition to keeping virtually all of the oil industry's substantial existing tax breaks, the Tax Act provides a new subsidy for how the companies deduct the costs of capital expenditures such as drilling equipment, lowering their tax burden while encouraging more capital spending, with the likely result of increased production and other operations. It also opened part of Alaska's Arctic National Wildlife Refuge to oil and gas development, a move that was fiercely opposed by conservationists.

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