5 Ways BP's Oil Spill Will Cost You (Slide 4 of 5)
Your Taxes May Rise
Wildlife workers feed birds slicked in oil from the Gulf. | Image © BP p.l.c.
So far, the U.S. government has spent $138 million on the Deepwater Horizon cleanup on costs ranging from $17.7 million to help coordinate the scientific response to the spill by the National Oceanic and Atmospheric Administration to $10.6 million spent by the Fish and Wild Life Service to rescue oil-soaked birds.
Will BP reimburse all these costs to taxpayers? The government insists the answer is yes, and President Obama did get BP to agree to put $20 billion aside to pay damage claims to fishermen and others along the Gulf Coast. Timothy G. Eastman, chief of the case management division for the National Pollutions Fund Center, says that BP will eventually be billed for the entirety of the taxpayer dollars spent on cleanup efforts. At this point it still looks unlikely that BP would file for bankruptcy, but it’s a possibility. And if BP turns out to stand for Bankruptcy Protection, taxpayers could be left holding the bag.
Either way, Deborah Allen Hewitt, a professor of economics and finance at the Mason School of Business at the College of William and Mary, thinks taxpayers will be on the hook for at least some of the final costs.“I expect a great deal will be funded by the taxpayers and the localities in the Gulf,” Hewitt says, adding that Gulf residents may eventually end up seeing tax hikes as states and municipalities attempt to recover and promote tourism.
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