BUSINESS — BP USED OIL INDUSTRY TAX BREAK TO WRITE-OFF ITS RENT FOR FAILED DEEPWATER RIG: Reports continue to demonstrate how deeply unprepared BP was to deal with its disaster in the Gulf of Mexico with tar balls reaching Texas’ shores and entering Louisiana’s Lake Pontchartrain. But the New York Times now explains how the oil behemoth took advantage of U.S. tax policies to significantly benefit from the failed Deepwater Horizon rig. Transocean, the company that owns that rig, used well-known tax havens in the Cayman Islands and Switzerland to reduce its U.S. corporate tax rate by almost 15 points. And due to a break in the U.S. tax code, BP was also allowed to write off 70 percent of the rent it paid to Transocean on its own tax bill. “According to a letter sent in June to the Senate Finance Committee,” the benefit amounted to “a deduction of more than $225,000 a day since the lease began.” As the Wonk Room’s Pat Garofalo writes, “[E]ssentially, the U.S. taxpayer paid BP to lease a rig that was incorporated in a foreign country for the purpose of avoiding the U.S. corporate tax.” This benefit to BP is a symptom of a larger issue. Garofalo explains that “the U.S. tax code is actually riddled with breaks for the oil industry, despite that industry’s record profits in recent years.” Sima Gandhi, a senior policy analyst for the Center for American Progress, has counted nine different subsidies that the U.S. government gives to the oil industry, including refunds for drilling costs and refunds to cover the cost of searching for oil. Last month, only 35 senators voted for eliminating $35 billion of the industry’s subsidies. Fully cutting this corporate welfare would save $45 billion per year and, according to the Office of Economic Policy at the Department of Treasury, “affect domestic production by less than one-half of 1 percent.” “The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant,” said Sen. Robert Menendez (D-NJ) in response to BP’s Deepwater write-off. “There is no reason for these corporations to shortchange the American taxpayer.”