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This penalty won't hurt BP's bottom line as much as we think. According to Gretchen Morgenson, businesses deduct these type of "expenses" on their taxes and end up not paying taxes or, in the case of BP, reaping a windfall. "There is nothing new about corporations reaping tax benefits from payments made to remedy wrongdoing. Every so often, though, the topic stirs outrage. After the Gulf of Mexico oil spill, for example, BP received a $10 billion tax windfall by writing off $37.2 billion in cleanup expenses." This is a clear example of moral hazard.
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