The idea that any business could force you to pay its taxes may strike some readers as beyond belief. When I first heard about this more than a decade ago my skepticism meter hit high alert. Then I started reading the laws, regulations, and official proceedings, none of which made the news. I’ve been writing about it ever since, hoping the public will demand an end to this abuse.
The way it works is simple: The Federal Energy Regulatory Commission (FERC) sets the rates that monopoly pipelines can charge. The rates are based on all of their costs—people, equipment, taxes, and the corporate income tax. But that last expense is fake. The pipelines are exempt from that tax.
How Consumers End Up Paying Oil Pipeline Taxes
No industry benefits more from the forced payment of taxes for private gain than the pipelines that are the subject of the latest court ruling.
Pipelines are monopoly rights-of-way granted by government. The rates that oil pipelines charge shippers—oil companies, airlines, chemical companies—to move their product across the country are regulated under a law first enacted in 1887, the Interstate Commerce Act, which was designed to protect shippers from abuses by railroads—and was partly drafted by those railroads. Natural gas pipelines are regulated under updates to a 1938 law.Read the whole article by clicking here.
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