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.
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.
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.
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.
So we should not make environmental cleanup tax deductible? What about organizations who do environmental cleanup in general without having made spills?
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.
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.