Chilis

Andrew Esposito

Finance 3200

Easy Points Review 1

We wish we had the same tax incentives as Big Business

In a recent article I read in the American Chronicle taxes surrounding the recent BP oil spill raise and answer questions about taxes that are places on big business and US citizens. For example, General Electric created over 10.3 billion in pretax income and ended up paying nothing after all taxes were filed. After finding loopholes, charities, and other ways to avoid their increasing tax bill, GE ended up with a tax benefit of 1.1 billion in the year 2009.

These taxes owed and then deleted by big business make me wonder; how are they able to write off almost everything, and sometimes even make money? One way it is done is by the ownership of subsidiaries, Exxon currently owns 20. These subsidiaries in the Bahamas, Bermuda and the Cayman Islands legally refuge their cash flow from operations and other forms of tracking expenses to Uncle Sam. BP is also well known for doing this by moving their registry of oil drilling from place to place. By changing their recent ownership from the Marshall Islands, to the Cayman Islands, to Switzerland in 2008, they were able to avoid paying corporate income taxes to the United States. Another patriotic tax evasion made by BP recently is that of the “Deepwater Horizon” catastrophe in which BP is permitted to write off 70 % of the rent payments for the Deepwater Horizon rig. This allowance to write off taxes for deduction helps them for more than $225,000 a day.

If a catastrophic event happened to a community in the United States they would be able to do the same thing right? Wrong. After Hurricane Katrina left New Orleans scarred and wrecked after its devastating blow, home owners were unable to write off home repair, clean up, and supplies for local relief efforts. Doesn’t seem right does it?

The main reason for this ability for these big businesses to take write offs on their taxes is due...