Thursday, July 31, 2008

Exxon Posts Record $32.36 Billion Tax Payment

CNN's headline: "Exxon posts record $11.68 billion profit."
According to CNN, Exxon Mobil once again reported the largest quarterly profit in U.S. history Thursday, posting net income of $11.68 billion on revenue of $138 billion in the second quarter.
That profit works out to $1,485.55 a second.

Buried in the story we also find that "In addition to making hefty profits, Exxon also had a hefty tax bill. Worldwide, the company paid $10.5 billion in income taxes in the second quarter, $9.5 billion in sales taxes, and over $12 billion in what it called 'other taxes.'"

MP: In other words, Exxon Mobil paid (or at least collected) $32.361 billion in taxes in the second quarter, which works out to $4,114 in taxes per second. Another way to look at it - Exxon paid (or collected) almost $3 in taxes ($32.361 billion) for every $1 in profits ($11.68 billion), see chart above.

22 Comments:

At 7/31/2008 11:51 AM, Blogger juandos said...

Hey Professor Mark, glad you've been following the Exxon tax adventures for awhile now...

You are ganering quite the reputation with others also...

Good for you! Its good stuff!

 
At 7/31/2008 12:02 PM, Anonymous Anonymous said...

Don't you think that the end-user of Exxon's products directly paid the sales and possibly the other taxes?

In other words, Exxon is just a conduit for 70% of the taxes paid, ignoring that the consumer or stockholder pays the corporate income taxes indirectly in any event.

Perhaps you can enlist a grad student to perform some university level analysis instead of this grade school arithmetic.

Why did Exxon's production decline is the more important issue for US energy security.

 
At 7/31/2008 12:26 PM, Anonymous Fred said...

Notihng like a little bit of sunshine to brighten the day and bring honesty to the debate.

 
At 7/31/2008 1:30 PM, Blogger juandos said...

Gee! Where's the concern for the Exxon shareholders here?

What are you infering here anon? "In other words, Exxon is just a conduit for 70% of the taxes paid, ignoring that the consumer or stockholder pays the corporate income taxes indirectly in any event"...

Are the CEOs of Exxon and others at the top of the corporate totem pole supposedly not paying their fair share of the extortion?

How many retirement portfolios have some Exxon stock in them?

Where is the concern for them?

BTW fred, which honesty are YOU alluding to?

 
At 7/31/2008 3:58 PM, Anonymous QT said...

Anon. 12:02,

Exxon represents a high compliance, private tax collection service which requires little government administration to deliver a consistent, reliable, stream of revenue.

By comparison to the collection of other taxes, the government and taxpayers are getting outstanding service.

 
At 7/31/2008 4:14 PM, Anonymous Anonymous said...

By these numbers, Exxon is paying a corporate tax rate of 7.6%, a rate that shows how heavily subsidized this industry is (tax breaks for one industry over others are effectively subsidization for that industry.) Then, please remember that the government must spend billions of dollars on roads so that consumers can use Exxon's product.

I never can understand why today's conservatives want to continue our socialistic fossil-fuel economy.

 
At 7/31/2008 4:22 PM, Blogger Marko said...

MP, you read my mind. When I heard the press extorting with glee that Exxon is taking our hard earned money in these times of woe, I thought I would come to CD to see what the taxes were.

To answer the stupid naysayers, maybe we should post Exxon's EBITDA, and then we could see what their true tax rate was. In addition, I would like to know what the amount of the tax subsidy they received was - I am sure it is dwarfed by the amount of taxes they collected.

Also, does this mean that the oil industry is paying for the entire cost of the Iraq war themselves nowadays?

Thanks!

 
At 7/31/2008 4:55 PM, Anonymous Anonymous said...

Anon @ 4:14. You need to learn how to calculate a tax rate. 7.6% is nowhere close. I don't see a financial statement for this quarter at Yahoo Finance yet, but the tax rate of Exxon will be more than 40%.

It also appears that you mean tax rate for income taxes only (as you ignored the other taxes), but you still are not calculating it correctly. Hint: You don't divide the number by total revenue. Is that how your income taxes are calculated? The answer is, of course, no.

 
At 7/31/2008 4:56 PM, Anonymous QT said...

Marko,

Excellent questions. Financial reports are available here.

With regard to 7.6% income tax rate, figures are available for the full year 2007. These figures can be found on the income statement and are stated in millions of dollars:

EBITDA: 70,474
Income Taxes: 29,864
Net Income: 40,610

The actual tax rate paid was 42.3%not 7.6% as suggested above.

 
At 7/31/2008 5:02 PM, Blogger K T Cat said...

I wonder what the comparable tax bite was for Apple. I know Apple has a higher profit margin.

 
At 7/31/2008 7:50 PM, Anonymous QT said...

"please remember that the government must spend billions of dollars on roads so that consumers can use Exxon's product"

Wasn't that the purpose of gas taxes?

 
At 7/31/2008 9:06 PM, Blogger bobble said...

"$9.5 billion in sales taxes, and over $12 billion in what it called 'other taxes.'"
MP: In other words, Exxon Mobil paid (or at least collected) $32.361 billion in taxes in the second quarter"

professor perry, this post is just plain dishonest.

you state in the chart headline that exxon's total taxes paid is $32B.

then in the body of the post it says that:

well, a large portion of the headline number might be taxes consumers paid, that exxon just collected for the government. plus other amounts that we really don't know what they are, but they have the word 'tax' attached to them so we'll add it to the headline number.

 
At 7/31/2008 10:10 PM, Anonymous Anonymous said...

Bobble,

Can you fricking read?

From the LINK:

" Income taxes 10,526 7,668 19,828 14,452
Sales-based taxes 9,538 7,810 17,970 15,094
All other taxes 12,297 10,665 23,904 21,073
Total taxes 32,361 26,143 61,702 50,619"


See the words "all other taxes"?

For someone else reading, and math, impaired.

From the LINK: "The effective income tax rate increased to 49% versus 44%."

I understand the dense on purpose agenda of some. But, it does get tiring having to wade through the stupid.

 
At 7/31/2008 11:15 PM, Anonymous Fred said...

"BTW fred, which honesty are YOU alluding to?"

I am commenting on Professor Perry's post. What did you think?

 
At 8/01/2008 8:47 AM, Blogger juandos said...

Well fred I was just wondering that since you didn't specify and that your comment was below anon's @ 12:02 PM, I was wondering...

anon @ 4:14 PM says: "By these numbers, Exxon is paying a corporate tax rate of 7.6%, a rate that shows how heavily subsidized this industry...."...

Is that the, "new math" at work there?

"By comparison to the collection of other taxes, the government and taxpayers are getting outstanding service"...

Great observation qt and thanks for those links too...

 
At 8/01/2008 5:17 PM, Blogger bobble said...

anon@10:10 blurts out:"Can you [Bobble] fricking read?"

why yes i can. can you?

the amounts that i was referring to, and that you unnecessarily copied in from the link are right at the top of my post.

my point is that the GRAPH and the GRAPH HEADLINE are dishonest because they imply that exxon subtracted the entire tax amount shown on the chart from earnings in determining profit.

the implication comes from the fact that the chart compares profits (called 'net income' on the chart) to taxes. Net income is equal to the income that a firm has after subtracting costs, and expenses (including taxes) from the total revenue. thus, all taxes shown would need to have been subtracted from revenue if the chart is to make sense. some taxes (for instance, sales taxes) are not.

yet, the relationship of the taxes (excepting income tax which *is* subtracted from revenue) to profit is unexplained by either MP or the link. how much of the $32B came out of exxon's revenues when determining profit. how much did exxon just collect from someone else and pass them along to the govt? what are the "other taxes?"

MP himself appears to be not quite clear what the accounting significance of the tax amount paid is: thus, he adds a parenthetical "or at least collected" for an unspecified portion of the tax amount on the graph. furthermore he doesn't explain at all what $12B of "other taxes" are and how they relate to profit.

 
At 8/02/2008 6:35 AM, Blogger juandos said...

"yet, the relationship of the taxes (excepting income tax which *is* subtracted from revenue) to profit is unexplained by either MP or the link. how much of the $32B came out of exxon's revenues when determining profit. how much did exxon just collect from someone else and pass them along to the govt? what are the "other taxes?""...

Still missing the point I see...

Why is Exxon, its shareholders, and it customers paying all thess taxes in the first place?

What did the government (local, state, & national) do, what acts did it perform to bring even one barrel out of the ground, convert it to something useful, and get it to the customer?

The various government entities did something but was it $32 billion plus worth of services and help?

 
At 8/02/2008 9:14 AM, Anonymous bob wright said...

nicely said juandos.

bobble, you are exhibiting a classic case of "can't see the forest for the trees".

 
At 8/02/2008 1:09 PM, Anonymous Anonymous said...

I like this 49% taxe rate.......

No one ask about the $12 billion cash converted to equity... You have to pay taxes on that.
If they don't... I want the same deal....

Bob0colo

 
At 8/04/2008 12:05 PM, Blogger Vince said...

Here's some information on the actual taxes paid by Exxon, compared to their income. This is for 2007 annual data, but it seems doubtful that the U.S. tax bill will be much different.

"If you read their 2007annual report, you come away with the impression that Exxon Mobil paid $29.8 billion dollars in US income taxes. That’s 42% of their net income before taxes. However, the percent that is actually US income taxes is less than the rate of payroll taxes deducted from a worker’s wages.

I suggest you examine all of the details of its financial statements that are fully disclosed in the Security Exchange Commission report (K-10) which the company is required to file. In the 2007 report, Exxon Mobil states it’s net income before taxes was $70,474,000 and while the company’s consolidated statement reported “income taxes” of $29,864,000, the breakdown reveals only $4,490,000 was actually US Federal Income Taxes. That represents 6.4%.of its total income before taxes. The remaining portion, after US state income taxes, amounted to $24,744,000 in foreign income taxes."

Since Exxon is getting its oil from foreign holdings at a cost that is a small percentage of the market price, the foreign taxes paid to the countries owning the oil seems arguably justifiable. The point to see is that Exxon paid a very modest U.S. tax rate of 6.4% of its income before taxes.

Taxation of oil and gas companies is extremely complex, and Exxon's reports distributed to the press and the public shed little light on the true tax burden. The often include in their "tax" burden, amounts of sales and other similar taxes that they collect on behalf of governments, yielding statements like, "Exxon paid more in taxes than it earned," and the one the Chuck Wilcher cited. If you applied this approach to accounting, most retail businesses would pay more in taxes than they earn, even if they paid no income taxes.

Here's the actual breakdown of 2007 Exxon taxes (in $millions):

http://www.jacksonforest.com/Exxon.htm

These numbers can be compared to 2007 revenue $370 billion, and net pre-tax income of $70,400 million ($70.4 billion).

Little U.S. tax is paid because most of the profits are attributed to overseas operations; so even though Exxon is a U.S. company, our tax laws don't require payment of taxes on profits of overseas operations.

 
At 8/04/2008 5:01 PM, Blogger PCP said...

Vince,

You brought up a good point that most others seem to miss. However, you left out the other important part which is their US earnings. If you want to calculate US tax rate, it should be done on US earnings and not total earnings. Their press release shows after tax US earnings of (4870000+4120000+1181000) 10171000. Their effective US tax rate is ~30.6%.

 
At 8/19/2008 1:26 AM, Blogger 宀苝Q said...

升降机 升降平台 登车桥 升降机 铝合金升降机 液压机械 升降台 高空作业平台 升降机 升降平台 无缝管 升降平台 弹簧 升降机 数据恢复 升降机 RAID数据恢复 北京心理咨询 服务器数据恢复 液压升降机 无缝钢管 升降平台 博客 升降机 Google排名 网站优化 心理咨询 升降机 升降平台

Cheap WoW Gold, World Of Warcraft Gold,the best WoW PowerLeveling and other MMORPG Power LevelingWOW Gold WOWGold World Of Warcraft Gold WOW Power Leveling WOW PowerLeveling World Of Warcraft Power Leveling World Of Warcraft PowerLeveling

Our company's products are Gas Alarm,Gas Detector,Breathalyser,Breathalyzer,Alcohol Tester,Co Alarm.Breathalyzer Gas Alarm Breathalyser Co Alarm Co Detector Alcohol Tester Alcohol Tester Gas Detector Please select one of our product categories to find out more.

 

Post a Comment

<< Home