Chesapeake Paid Almost No Income Taxes On $5.5 Billion In Profits

Dear Neighbors:
This article indicates that the subsidy drillers get was appropriate in the past but is no longer necessary.  Perhaps we can encourage Congress to stop this out-dated subsidy and spend the increased revenues on our veterans, our children, our seniors and/or our infrastructure.

For more information, read the story posted in HUFF Business. 

One scandal-ridden company has managed to essentially avoid paying U.S. income taxes for more than two decades.

Since its founding 23 years ago, Chesapeake has paid about 1 percent in taxes of its $5.5 billion in pretax profits, Bloomberg reports. Because of the risk that oil and gas companies could drill into a well that ends up being dry, they are allowed a loophole to stave off paying taxes on a large percentage of income. Less than a single percent of Chesapeake’s wells turned up dry last year.
Chesapeake has been marred by scandal in recent months. Investors stripped Aubrey McClendon, the company’s founder, of his chairmanship last month after reports surfaced that he, among other corporate governance issues, accepted a personal loan from a company that was working with Chesapeake.
Gail Larson
Trumbull Township

One scandal-ridden company has managed to essentially avoid paying U.S. income taxes for more than two decades.

Since its founding 23 years ago, Chesapeake has paid about 1 percent in taxes of its $5.5 billion in pretax profits, Bloomberg reports. Because of the risk that oil and gas companies could drill into a well that ends up being dry, they are allowed a loophole to stave off paying taxes on a large percentage of income. Less than a single percent of Chesapeake’s wells turned up dry last year.

Chesapeake has been marred by scandal in recent months. Investors stripped Aubrey McClendon, the company’s founder, of his chairmanship last month after reports surfaced that he, among other corporate governance issues, accepted a personal loan from a company that was working with Chesapeake.

Still, Chesapeake isn’t the only major company to use a loophole in an aim to lower its tax bill. Thirty of America’s most profitable companies paid nothing in income taxes over the last three years, according to a November report from the Citizens for Tax Justice. In addition, nearly 300 companies paid an average tax rate of 18.5 percent between 2008 and 2010. The U.S. corporate tax rate is technically 35 percent.

HUFF Post Business