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Headlines periodically blare that this regulator or that has imposed another jawdropping assessment on some gross polluter or other corporate criminal. “Justice Department Slaps BP with $20.8 Billion Punishment” the media shouted months after the oil behemoth spewed billions of gallons of crude into the Gulf of Mexico. That’ll teach ‘em!
Hardly. Corporate lawbreakers have colluded with Washington lawmakers to cut a sweetheart deal: Corporations are allowed to deduct huge chunks of their “punishment” from their corporate taxes, effectively forcing us common taxpayers to subsidize their criminality.
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The US Public Interest Research Group recently analyzed the government’s 10 biggest settlements with corporate violators, finding that 60 percent of the total was quietly classified as tax deductible. For example, rather than BP taking the full $20.8 billion hit that had been so widely publicized, it was allowed – without fanfare – to treat more than $15 billion of it as a tax deductible “cost of doing business.” That was on top of $37 billion in Gulf clean-up costs BP had already deducted from the taxes it owed to our public treasury. Similarly, in 2013 JPMorgan Chase signed a $13 billion settlement for defrauding investors, but $11 billion of that was eligible for a tax write-off – just part of a corporation’s routine expenses.
As PIRG rightly points out, when these settlements are allowed to be tax deductible, our leaders are sending a message to huge corporations like BP and JPMorgan Chase that polluting our environment and ripping off the American people are acceptable ways of doing business. Not only that, it also sends a message that it’s okay to make ordinary taxpayers subsidize these corporation’s nefarious behaviors. To learn more, check out the report at www.uspirg.org.