The line is open. Final note:
* MAYFLOWER OIL SPILL VICTIMS: WHO GETS HELPED?: U.S. Rep. Tim Griffin has gotten a lot of mileage today on his news release about filing legislation to exempt payments by ExxonMobil to Mayflower oil spill victims from the federal income tax, a benefit given in some other disaster circumstances.
A little flyspecking: The legislation makes no effort to define who should get benefits, just cover those who do. As you know, ExxonMobil has, to date, talked about compensation of “direct” victims, but residents a bit farther away who’ve complained of persistent fumes, fears of unseen chemicals and other life disruptions, say ExxonMobil hasn’t been very attentive. No payments; no tax exemption, naturally. Lawsuits have already been filed in expectation that ExxonMobil won’t provide adequate compensation.
So: What if people sue for damages Exxon won’t pay? Or what if they sue for amounts in excess of what Exxon is willing to pay? Griffin’s legislation DOES NOT provide a tax deduction for any money paid as a result of court-awarded judgments, his office said.
Griffin’s office disputed my suggestion that giving the victims a tax break, rather than pressing Exxon to scale up the payment to also cover taxes, amounted to a taxpayer subsidy of Exxon. The bill is about victims, not Exxon, the spokesman said. He added that Griffin had asked Exxon to make that additional payment.
Similarly, a spokesman said another of my questions wasn’t pertinent. It was about whether ExxonMobil would be able to deduct its payments to victims as an expense in computing ITS income tax — and thus create another way in which taxpayers would subsidize Exxon in covering the cost of the spill. Again, the bill is about spill victims only, not Exxon, he said. Pertinent or not, a CPA of my acquaintance said that Exxon COULD deduct this expense from its income in computing federal taxes, if it owed any. He also added that existing tax law already provides for deductibility of economic losses, including in value of homes through accidents, for income tax purposes, but the code is complicated and might not always shelter payments in excess of cost value of a property. But we won’t let such technicalities get in the way of a good news release by a congressman trying to get on the right side of a public disaster caused by an industry he’s championed.
UPDATE: I was reminded that Exxon deducted some half-billion in penalties from the Exxon Valdez oil spil from its income tax bill, already far below the effective rate corporations are expected to pay. In Exxon world, only the little guy pays taxes.
* MEDICAL MARIJUANA PROPOSAL TURNED BACK AGAIN: Attorney General Dustin McDaniel has again rejected the form of a medical marijuana initiative on account of ambiguities. He said it wasn’t clear enough that users couldn’t grow marijuana at home (the apparent intent) and also has a contradictory section related to transfers of marijuana between non-profit dispensaries. It will be resubmitted.