Lots of news today about the US Senate hearing on ending tax breaks for US oil companies. This article focuses on one executive’s claim that ending the tax breaks is un-American. Another article says that subsidies for exploration and drilling dates all the way back to 1916.
There is also an explanation of the different ways they measure tax obligations. The companies include local and state taxes, while the Senators are counting only federal taxes.
Just how much do big oil companies pay in taxes?
Exxon Mobil says it pays plenty — more in U.S. taxes than it earned in the United States last year.
Not so, say critics of the oil industry; the Center for American Progress says the oil giant’s effective federal income tax rate is about half the 35 percent standard for U.S. companies. The liberal-leaning think tank, citing Exxon Mobil’s filings with the Securities and Exchange Commission, says the corporation didn’t pay any federal income tax in 2009.
It all depends on how you count.
Exxon Mobil counts everything — not just federal income taxes, but also local property taxes, state taxes, gasoline taxes and payroll taxes. The Center for American Progress (CAP) and other analysts count only the company’s federal corporate income taxes.
“We pay our fair share of taxes,” said Kenneth Cohen, Exxon Mobil’s vice president for public affairs, who in a conference call recently lumped more than $6 of sales, state and local taxes together with every $1 of federal income tax paid in 2010.
But Exxon Mobil’s tax rate is “lower than the average American’s,” Daniel Weiss, an energy expert at CAP, countered in an analysis that put the company’s U.S. federal income tax rate in 2010 at just 17.2 percent.
Of course average Americans also pay state and local taxes. Whatever, it is pretty clear that oil companies–with their high profits–could afford to help with the US deficit better than most.
Unless the US want to continue draining the middle class to support big business and the rich.