| Or at least rewrite the part that deals with taxes on oil and natural gas production. Late last year the Republican heavy Alabama Supreme Court overturned a $3.6 billion judgement against Exxon Mobil in a dispute over taxes they owed Alabama for natural gas extracted here. Now, Lt. Gov. Jim Folsom advocates simplifying the tax code to avoid any future rannygazoo over how much Big Oil owes in taxes. "Alabama is blessed with wonderful natural resources, but we must require powerful corporations to pay a fair price if they are going to take advantage of our natural resources - like our oil and gas," Folsom said Wednesday. ... Alabama's tax on natural gas is currently a percentage of the value of the gas after it has been processed. Folsom said the Legislature should look at changing it in the upcoming session to a volume-based tax levied when the natural gas comes out of the ground.
Folsom said that would erase issues that came up in the Exxon Mobil dispute about what costs of production the company could charge off.
"That way Exxon will have to pay the same way you do - based on what they pump," Folsom said.
Not surprisingly, the petroleum industry spokesman quoted in the story thinks this is a very bad idea. He trots out some veiled threats to just stop pumping oil and natural gas in Alabama. Don't hold your breath, environmentalists. If you recall, the dispute was over natural gas royalties Exxon-Mobil owed the state of Alabama. Simple, non-legal jargon version is: they underpaid. The state argued Exxon-Mobil knew they owed more, underpaid on purpose and were guilty of fraud. Exxon-Mobil argued that Alabama knew or should have known they were being underpaid and didn't squeal at the time, so it was just an honest mistake. Two juries found fraud and awarded multi-billion dollar damages. The Republican dominated Alabama Supreme Court found a way to nullify both those jury awards. In light of this history, Folsom's plan to simplify the tax accounting makes a lot of sense. Eliminate the fine print, just charge a fee based on how much corporations extract and you eliminate the potential for fraud (or book keeping errors, if you're a Republican Supreme Court Justice) and the ensuing lawsuits and legal bills. Is this genius, or what? Republicans who oppose Folsom's plan will be arguing in favor of a complex tax code that requires beaucoup accountants to enforce and still results in expensive lawsuits and big bills to those evil trial lawyers. Look out for the exploding heads. |
