To: Loretta Lynch, Attorney General of the United States
No More Tax Deductions for BP Oil Spill
Not one penny of the settlement that BP pays for its negligence in the Deepwater Horizon disaster should be tax deductible. Negligence can not be deemed to be a 'regular cost of doing business.' Allowing a tax deduction sends the wrong message.
Why is this important?
On Monday, October 5th, the Department of Justice announced the 'final' terms of a settlement with BP over its role in the 2010 Deepwater Horizon disaster. The proposed settlement would require BP Oil Company to pay $20.8 billion in damages as a result of gross negligence, but only $5.5 billion of that settlement will be non-tax deductible. As a result, BP could take a tax deduction on $15.3 billion of the settlement payments.
Of the $42 billion BP has paid to address the Deepwater Horizon disaster since oil first started spilling in 2010, about 80% has qualified for tax deductions, effectively shifting the cost of BP’s “gross negligence” onto taxpayers.
These write-offs send the wrong message. They diminish the value of settlements as a deterrent to future misbehavior. They are also costly for the public because taxpayers must make up for the lost revenue
through cuts to public programs, higher tax rates, or more federal debt.
It's time to demand an end to holding taxpayers accountable for corporate misconduct: no more write-offs for corporate wrongdoing.