When the drinks are flowing at the open bar, it's not a big surprise that patrons swarm for their free pints. Tax bills are the same, with amendments aplenty as the hours ticked on towards the Senate passage of a massive tax reform package last week. Hey, when you are spending somebody else's money and nobody has time to read what you are sticking in anyway, why not take a gander on a nice payout for your district friends?
New Earth Track analysis shines a light on fossil fuel subsidies through tax-exempt master limited partnerships (MLPs)
If a company or an industry is going to get subsidized, there are good ways and there are better ways for it to happen if one is sitting in the corporate suite. Among the best is to receive big subsidies that, while not flowing to your competitors, arrive in a form that nobody seems to notice. The benefits of this structure are clear: while the recipient gets a large slug of financial support, because few people see or understand the largesse, the political cost to both obtain and retain the subsidy is relatively low. Master Limited Partnerships, the subject of Earth Track's most recent
Special legislative provisions have allowed a select group of industries to operate as tax-favored publicly-traded partnerships (PTPs) more than 25 years after Congress stripped eligibility for most sectors of the economy. These firms, organized as Master Limited Partnerships (MLPs), are heavily concentrated in the oil and gas industry. Selective access to valuable tax preferences distorts energy markets and creates impediments for substitute, non-fossil, forms of power, heating, and transport fuels.
Master Limited Partnerships (MLPs) are a special corporate form, used primarily by natural resource industries. They enable firms to both raise capital on public equity markets and to pay zero corporate income taxes. MLPs deserve far more scrutiny as energy subsidies than they have received to date. Although the US Energy Information Administration (EIA) excluded them from their most recent study of US energy subsidies on the grounds that other industries also benefit (so the subsidies are not "energy-specific"), EIA's logic is weak. Based on data compiled by the National Association o