by Daniel J. Weiss and Seth Hanlon

Republican presidential candidate Mitt Romney’s economic plan slashes corporate tax rates while failing to identify a single corporate tax loophole to eliminate. Highly profitable large oil companies that already enjoy lucrative tax breaks stand to receive some of the biggest benefits from Gov. Romney’s plan.

The world’s five biggest public oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell—would keep special tax breaks worth $2.4 billion each year. And by cutting corporate tax rates, the Romney plan could lower the companies’ annual tax bill by another $2.3 billion, based on an analysis of the companies’ tax expense for 2011. The special tax breaks, supplemented by Gov. Romney’s lower corporate rates, could benefit the oil companies by more than $4 billion annually.

As we will show, these five companies are hardly in need of a tax cut: They earned a combined record profit of $137 billion in 2011 due to high oil and gasoline prices.

Breaking down Gov. Romney’s tax breaks for Big Oil

Gov. Romney’s economic plan proposes to cut the corporate income tax rate from 35 percent to 25 percent—nearly a one-third reduction. That could provide a combined tax cut of at least $2.3 billion annually to the five largest publicly owned oil companies, according to an analysis of their 2011 public financial statements. That includes $1.5 billion for the three domestic oil companies and $800 million for the two foreign-owned companies. Since it is of course impossible to predict their future profits, this estimate is based on their 2011 financial data, including their U.S. federal income tax expense. (See the methodology section for more information.)

In addition, existing oil tax breaks would be protected under Gov. Romney’s plan. Though he has spoken in general terms about broadening the tax base, he has failed to name even one corporate tax loophole he would eliminate. His campaign has specifically criticized President Barack Obama’s efforts to close oil tax loopholes. And his chief energy advisor, oil executive and Romney super PAC donor Harold Hamm, has urged Congress to maintain the oil industry’s special tax breaks.

Preserving Big Oil’s existing tax breaks would save the five companies $2.4 billion annually, according to the Congressional Joint Committee on Taxation. The value of these tax breaks for each company is not public. But using the rough proxy of apportioning them according to the companies’ U.S. revenue, the three American companies receive approximately $1.9 billion of these tax breaks while the two foreign companies receive $500 million.

Under reasonable assumptions, the five oil companies’ total annual tax bills would be $4.2 billion less than they would be without the special tax breaks that Gov. Romney would preserve and without Gov. Romney’s corporate tax rate cut. (This is less than the sum of the estimates of the two elements of Gov. Romney’s plan because of interactions between them—reducing tax rates lowers the value of deductions.)

None of these figures includes the impact of Gov. Romney’s proposals to exempt overseas profits from U.S. taxes or to allow existing overseas profits to be repatriated at a special low tax rate. The three U.S. companies—ExxonMobil, Chevron, and ConocoPhillips—stashed away a combined $76 billion in profits overseas at the end of 2011. Adding in the benefits to the oil companies of these parts of the Romney plan could greatly increase their largess from a Romney presidency.

The oil tax windfall would be the same under the House-passed fiscal year 2013 budget resolution sponsored by House Budget Committee Chairman Paul Ryan (R-WI), which Gov. Romney endorsed. The Ryan budget also lowers the corporate rate to 25 percent while keeping the existing tax breaks for these five companies. Gov. Romney heartily endorsed the Ryan budget plan, saying, “I applaud it. It’s an excellent piece of work, and very much needed.”

The chart below shows the oil companies’ average annual tax breaks and their new cuts under the Romney-Ryan plan in addition to their profits last year.

Big Oil companies are the last ones that should be getting tax cuts

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by Rona Fried, via Sustainable Business

Having a green certified home adds 9% to its appraised sales value in California, finds a new study.

The study is the first rigorous, large-scale economic analysis of the value of green home labels in California and was conducted by state university professors.

Researchers conducted a pricing analysis of all 1.6 million single-family home sales in California from 2007-2012, controlling for all other variables that typically influence selling price, such as location, size, age and amenities.

They documented that homes labeled with Energy Star, LEED or Greenpoint Rated (California’s label) sell for a premium of 9% compared to average similar homes.

The average sales price of a non-certified California home is $400,000. Green certification raises the price by more than $34,800.

Interesting that the sales premium is greater than the cost of the green features people are paying for and it’s greater than resulting utility savings. The most common green features are insulation and air sealing of attic and walls, weather stripping and efficient HVAC – none of which are particularly expensive.

The authors conclude that part of the premium is the certification itself – the premium is highest in areas of California that also have the highest sales of hybrid cars. People will pay more to buy a house that’s green-certified because it fits their values.

They also found premiums to be higher in parts of the state that tend to have hotter climates, indicating that people valued these certifications as reassurance that their homes would stay cooler without more energy costs.

A report released last year by Lawrence Berkeley National Lab showed that having solar PV boosted the sales price in California. The premium was about the same as the cost of the solar system.

In Los Angeles County, the sales price of three homes was compared before and after they got green certification, and found a rise of 5.5-9%.

“Green upgrades aren’t usually tracked as home features on real estate listing services, which makes it challenging for appraisers to determine the monetary value of the upgrades,” says Debra Little, the appraiser. “We used methodologies beyond the typical appraisal scope, taking into account the energy efficiency benefits as well as factors such as healthier indoor air quality and sealing air leaks – which improves the durability and effective life of a home. We ultimately determined that the many benefits of green homes do lead to higher home values in the local market.”

Home #1, Whittier, CA

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