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United States

It pays to be dirty says FoE

Special federal tax breaks for some of the most polluting of America's industries -- including oil and gas -- will soar to $20.1 billion over the next five years, according to the Friends of the Earth (FoE). In a news report, Dirty Little Secrets, FoE says the oil and gas industries will get the highest rate of what it scathingly calls "polluter welfare" -- $13 billion from the federal government for the fiscal years 2000 to 2004. That is up from a level of $10.4 billion a year ago, for the period 1999-2003. In contrast, by 2001, when wind's Production Tax Credit is due to expire, the committee estimates that its cumulative cost to the US Treasury will have been $13 million. In 1999 it cost just $1 million dollars.

The rise in tax breaks for the oil and gas industry is faster than for the other polluting industries identified in the FoE report, such as coal mining, logging or agribusiness. Of the many subsidies identified is permission to immediately deduct "incidental expenses" for oil and gas drilling and development, costing taxpayers $1000 million over five years and including such basics as wages, repair, and site preparation.

"Tax loopholes continue to reward corporations that pollute the air and water, drill for oil and gas and cut down forests," says FoE's Brian Dunkiel. The report uses data from the non-partisan governmental Joint Committee on Taxation and brought new urgency to proposals in this year's US presidential campaign to slash such breaks. "Tax breaks for pollution are growing more expensive and are damaging the environment," said FoE's Gawain Knipke, before the field of presidential candidates narrowed to two last month.

Before dropping out of the race, both the Democratic candicate Bill Bradley and Republican candidate John McCain had been calling for the elimination of a variety of special tax breaks, including some of those for oil and gas, chemical companies, mining and agribusiness. Vice President Al Gore, the Democratic nominee, is also pro-renewables but has been less vociferous about the power of special interests in US politics.

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