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Have you read the article slowly, out loud, or otherwise? > It may be surprising that the costs of cleaning up an environmental disaster are tax-deductible. Bu

Have you read the article slowly, out loud, or otherwise? > It may be surprising that the costs of cleaning up an environmental disaster are tax-deductible. But such write-offs are legal, qualifying as “ordinary and necessary” business expenses. By contrast, fines and penalties are not deductible. Oil giant BP was able to deduct most of the settlement it reached with the government over the Deepwater Horizon spill because much of it went to address the environmental calamity, rather than to penalties for wrongdoing. You have offered no argument on one of the central questions at play, and are just condescendingly stating mechanisms that are already stated within the article, which crucially, also contains an actual argument and justification.

vorpalhex 5y ago
Sure, so let's address the other point about cleanup not being a fine. If you go spill a bunch of oil, you'll get a fine (a punishment) and you will have to do your best to fix the damage (as much as it can be fixed). That cleanup is not a fine. It's distinct and separate. It is not the punishment. Cleanup is also not a determinate amount. There is no inspector you can fly out who can eyeball the damage and give you any meaningful estimate. It's done when it is done and it costs what it costs. That makes cleanup an expense, therefore diminishing income. If you think the fines should be higher then that's great. You can totally charge them more fines, and they can't treat that punishment as an expense. You can't however start weaponizing tax code against people you don't like. You can't use the cleanup as a second punishment.
- dundarious 5y ago
  That is finally an actual argument. The problem with treating such environmental cleanup as just another cost, is that it's just another cost. It may be economical to just do the damage, or at least to cut corners such that there's an "unreasonable" risk of doing the damage. After the fact, you can always push for low-ball cost estimates, try to cap your max payout to that level, push back on actually doing the work and paying out (though as I've said in another comment, the article does a poor job of explaining if that's really happening). It's a case where "it's easier to ask forgiveness" has huge problems. I think tax write-offs should be for "legitimate costs of doing business". If the damage was foreseeable (which is not really dealt with in the article, except very obliquely below) and the company is not cooperative in cleanup, there's an argument that it should not be deemed a "legitimate cost of doing business", as to do so only encourages repeat events. It isn't second punishment. > It took years for the extent of the spill to become known. Taylor disclosed almost nothing about the accident and fought public records requests. The reality unspooled thanks to the persistence of environmental groups, investigative reporting, and revelations from a dizzying array of suits and countersuits. > According to a later review by the Coast Guard, Taylor Energy was “obstinate, difficult to deal with and verbally combative,” and preferred “to employ stall tactics over cooperation with an intention to confuse, delay or misdirect” the government.
  - vorpalhex 5y ago
    All businesses that transport chemicals will have a spill. Until we transition entirely off of oil, oil spills are a part of life. We can reduce them, we can limit the damage but we can't prevent them. Yes, companies can be less than ideal at fixing spills. We have tools like auditors and other third parties as a control. Tax write offs are for anything that costs you money as a business. Your accountant needs a chair and a laptop, your hairdresser has different needs like scissor sharpening. There is no standards body fit to determine what constitutes a "real business expense" outside of the IRS auditors who do so post-facto. That the oil company wasn't cooperative might mean we should fine them more but doesn't affect their tax code. Tax code is not moralistic.
    - dundarious 5y ago
      The tax code is absolutely used as an incentive and punishment structure to guide behavior. Things are made tax deductible or not all the time. We don't need to get into questions of morality. And there's no issue with enforcement here. You say it's not deductible and maybe you audit their books after a few years. If they tried to write it off, come down on them like a ton of bricks.
      - vorpalhex 5y ago
        So we should not make environmental cleanup tax deductible? What about organizations who do environmental cleanup in general without having made spills?
        dundarious 5y ago
        Ideally, restitution should not be deductible, but it is. My understanding is that that's a pretty recent development, meaning it doesn't have to be so, and if it's undesirable, it can be changed. I think looking at it specifically from the angle of environmental disasters isn't useful or appropriate.

vorpalhex 5y ago

Sure, so let's address the other point about cleanup not being a fine. If you go spill a bunch of oil, you'll get a fine (a punishment) and you will have to do your best to fix the damage (as much as it can be fixed). That cleanup is not a fine. It's distinct and separate. It is not the punishment. Cleanup is also not a determinate amount. There is no inspector you can fly out who can eyeball the damage and give you any meaningful estimate. It's done when it is done and it costs what it costs. That makes cleanup an expense, therefore diminishing income. If you think the fines should be higher then that's great. You can totally charge them more fines, and they can't treat that punishment as an expense. You can't however start weaponizing tax code against people you don't like. You can't use the cleanup as a second punishment.

dundarious 5y ago
That is finally an actual argument. The problem with treating such environmental cleanup as just another cost, is that it's just another cost. It may be economical to just do the damage, or at least to cut corners such that there's an "unreasonable" risk of doing the damage. After the fact, you can always push for low-ball cost estimates, try to cap your max payout to that level, push back on actually doing the work and paying out (though as I've said in another comment, the article does a poor job of explaining if that's really happening). It's a case where "it's easier to ask forgiveness" has huge problems. I think tax write-offs should be for "legitimate costs of doing business". If the damage was foreseeable (which is not really dealt with in the article, except very obliquely below) and the company is not cooperative in cleanup, there's an argument that it should not be deemed a "legitimate cost of doing business", as to do so only encourages repeat events. It isn't second punishment. > It took years for the extent of the spill to become known. Taylor disclosed almost nothing about the accident and fought public records requests. The reality unspooled thanks to the persistence of environmental groups, investigative reporting, and revelations from a dizzying array of suits and countersuits. > According to a later review by the Coast Guard, Taylor Energy was “obstinate, difficult to deal with and verbally combative,” and preferred “to employ stall tactics over cooperation with an intention to confuse, delay or misdirect” the government.
- vorpalhex 5y ago
  All businesses that transport chemicals will have a spill. Until we transition entirely off of oil, oil spills are a part of life. We can reduce them, we can limit the damage but we can't prevent them. Yes, companies can be less than ideal at fixing spills. We have tools like auditors and other third parties as a control. Tax write offs are for anything that costs you money as a business. Your accountant needs a chair and a laptop, your hairdresser has different needs like scissor sharpening. There is no standards body fit to determine what constitutes a "real business expense" outside of the IRS auditors who do so post-facto. That the oil company wasn't cooperative might mean we should fine them more but doesn't affect their tax code. Tax code is not moralistic.
  - dundarious 5y ago
    The tax code is absolutely used as an incentive and punishment structure to guide behavior. Things are made tax deductible or not all the time. We don't need to get into questions of morality. And there's no issue with enforcement here. You say it's not deductible and maybe you audit their books after a few years. If they tried to write it off, come down on them like a ton of bricks.
    - vorpalhex 5y ago
      So we should not make environmental cleanup tax deductible? What about organizations who do environmental cleanup in general without having made spills?
      - dundarious 5y ago
        Ideally, restitution should not be deductible, but it is. My understanding is that that's a pretty recent development, meaning it doesn't have to be so, and if it's undesirable, it can be changed. I think looking at it specifically from the angle of environmental disasters isn't useful or appropriate.