Thursday, August 09, 2012

"Taxation Hero": ExxonMobil Paid More Than $1 Trillion in Taxes Since 1999, Three Times Its Profits

Click table to enlarge.
In their July 2012 policy brief "Investment Heroes: Who’s Betting on America’s Future?" Diana Carew and Michael Mandel of the Progressive Policy Institute (PPI) recognized 25 American companies as "Investment Heroes" of 2012 for their collective investment of $136 billion in U.S. capital expenditures.  Ranked as America's third largest "investment hero" was ExxonMobil, for its $11.7 billion of investment spending in the U.S. last year building oil and natural gas pipelines and exploratory costs for new sources of oil and gas. 

In a Forbes article today, "Taxation Hero: ExxonMobil Pays $3 In Taxes For Every $1 In Profit," AEI's Nick Schulz points out that since Exxon and Mobil merged in 1999, the energy giant has paid more than $1 trillion in taxes to various governments, see chart above.  Nick conludes: 

"That’s more than double its net cash flow over the same period and almost three times its profits of $352 billion.  Think about what this means: For every dollar in profits it earns for its shareholders, ExxonMobil earns nearly three dollars for governments.

Here’s an idea: Mandel and his team might also want to compile a list of “taxation heroes” given the enormous sums of money firms such as ExxonMobil pour into government coffers."

MP: I concur and hereby nominate ExxonMobil as a model, American "taxation hero" for its $1 trillion of tax payments over the last thirteen years.   In 2011 alone, ExxonMobil's total tax bill was an eye-popping $104.52 billion, which works out to $286 million in taxes every day, $11.9 million in taxes every hour and a tax bill of almost $200,000 every minute.

Further, ExxonMobil paid more than $3 in taxes last year ($104.52 billion) for every one dollar it spent on "capital and exploration expenditures" ($33 billion total, of which $11.7 billion PPI says was invested in the U.S.).  If ExxonMobil deserves "Investment Hero" status for its capital expenditures last year, it certainly deserves "Taxation Hero" status for its even much greater spending on taxes.  

47 Comments:

At 8/09/2012 3:49 PM, Blogger Methinks said...

Yay! I'm so glad Nancy Pelosi has extracted the money necessary to not only subsidize her "donors" but to fly back and forth to the swamp by the Patomic in the lap of private jet luxury. Wealth redistribution is such a must in a rich society.

Do you think she'll send a thank you note to Exxon? Me neither.

 
At 8/09/2012 3:54 PM, Blogger VangelV said...

For every dollar in profits it earns for its shareholders, ExxonMobil earns nearly three dollars for governments.

So much for the free country bit.

 
At 8/09/2012 4:20 PM, Blogger Scott Drum said...

I know this won't happen, but I'd like to see Mitt Romney publicly thank XOM for their $1 Trillion contribution. It would be highly provocative and might actually cause some journalist to do real research instead of simply repeating nonsense.

Of course, in my fantasy, Romney says he WISHED he could thank XOM, but he really has to thank all the people who bought their fuel products -- these being the people who actually provided the money to pay the taxes.

 
At 8/09/2012 4:22 PM, Blogger Paul said...

Hillary Clinton's "You didn't built that" moment regarding the oil companies:

"Now look, what it means is that the oil companies have made out like bandits. ... And there is no basis for them to have these huge profits. They're not inventing anything new. ... You set a baseline, and above that baseline you begin to tax their profits."

 
At 8/09/2012 4:25 PM, Blogger Rufus II said...

Basically, they're "Royalties" masquerading as "taxes." Quite the scam.

 
At 8/09/2012 4:29 PM, Blogger Rufus II said...

Personally, I would like to see Exxon "Thank" the thousands of American Servicemen, and women, that died, and were maimed in furtherance of their "Trillions."

 
At 8/09/2012 4:55 PM, Blogger VangelV said...

Basically, they're "Royalties" masquerading as "taxes." Quite the scam.

It is money that went to the government when the government had nothing to do with earning it.

 
At 8/09/2012 4:56 PM, Blogger VangelV said...

Personally, I would like to see Exxon "Thank" the thousands of American Servicemen, and women, that died, and were maimed in furtherance of their "Trillions."

Really? Which contracts did Exxon get because of the stupid decisions of the government? The war may have been fought for access to oil but it was not fought to help Exxon.

 
At 8/09/2012 4:57 PM, Blogger Jet Beagle said...

Rufus: "Personally, I would like to see Exxon "Thank" the thousands of American Servicemen, and women, that died, and were maimed in furtherance of their "Trillions."

Please explain this. How did ExxonMobil benefit from the death of American servicemen?

 
At 8/09/2012 5:07 PM, Blogger marmico said...

Of XOM's $31 billion in 2011 income tax expense, the feds received $1.55 billion and the states $0.48 billion for a total of $2.03 billion. That's 7% of the expense. So 93% of income taxes were to non-U.S sources.

 
At 8/09/2012 5:10 PM, Blogger juandos said...

"Personally, I would like to see Exxon "Thank" the thousands of American Servicemen, and women, that died, and were maimed in furtherance of their "Trillions.""...

Yet another mediamatters moment, rufus?

You just can't help yourself can you?

I'm wondering when Exxon will finally be pushed into doing a XCor Aerospace type of move to a more business friendly country?

 
At 8/09/2012 5:25 PM, Blogger T J Sawyer said...

I love asking my relatives how much money they think Walmart makes on a hundred dollar sale. (three to four dollars - They never come close.)

And then follow up with, "And how much does the state of Minnesota make on the same sale? At least they can come pretty close on that one.

And don't forget that the biggest "vendor" payment that a company makes is almost always to the U.S. Treasury, paying the 20-40% of labor cost that the federal government thinks is their "fair share." It's sad that this number never gets reported as a line item in an annual report.

 
At 8/09/2012 6:26 PM, Blogger William A. Manning said...

great post on here & aei

 
At 8/09/2012 6:38 PM, Blogger Methinks said...

"Now look, what it means is that the oil companies have made out like bandits. ... And there is no basis for them to have these huge profits. They're not inventing anything new. ... You set a baseline, and above that baseline you begin to tax their profits."

Great. Now let's ask her on what basis Bill charges such enormous speaking fees and reaps profits Exxon can only dream of. And, while we're at it, what about her own cattle futures profits? Did she invent cows?

 
At 8/09/2012 7:23 PM, Blogger Adios said...

You're a bunch of lemmings.
An excise is considered an indirect tax, meaning that the producer or seller who pays the tax to the government is expected to try to recover the tax by raising the price paid by the buyer (that is, to shift or pass on the tax). As for 'other' taxes, it is doubtful that E-M deserves hero props. Such large sums labeled 'Other' is a dubious practice. This blog is a joke.

 
At 8/09/2012 7:46 PM, Blogger Jon Murphy said...

We're not lemmings. We get paid to do this.

The Koch-News Corp-Illuminatti pays us well to perpetuate these myths. The idea is to get the ignorant masses to willingly accept their slavery to the Old Gods. Only once all obey us, then can the Dark Lord Cthulhu rise and reclaim his rightful place as ruler of this world.

The sooner you accept this fact, the less painful your enslavement will be.

Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn

 
At 8/09/2012 7:57 PM, Blogger Methinks said...

What Jon Murphy said!

Sfiwe ewehw y'ahh FOEUAW!!!!

 
At 8/09/2012 7:59 PM, Blogger Jon Murphy said...

You know, Methinks, I quite possibly could be insane. :-P

 
At 8/09/2012 8:34 PM, Blogger Hydra said...

Yeah, a tax rate of what? 2%?

 
At 8/09/2012 8:35 PM, Blogger Che is dead said...

Exxon's big bet on shale gas -- Exxon was a little slow to recognize the magnitude of what was happening right on its doorstep. Not long after he became CEO in 2006, Tillerson decided to investigate. He formed a joint venture with an independent driller in the Barnett and leased a bunch of acreage. "I said, 'All right. Go out and develop a position, and my primary objective is I want to understand this, and I want to learn about it,' " says Tillerson. After about a year he sold off the assets. But the Exxon CEO had learned a couple of important things: First, that shale gas was going to be significant. And second, that Exxon was late to the party ... Since the acquisition, XTO's proven shale gas reserves have increased 81%, through a combination of strategic acquisitions and development of existing acreage, to 82 trillion cubic feet -- enough to meet demand in the Dallas-Fort Worth area for 150 years. "Exxon made a bet on natural gas, and so far they are underwater, because the price of gas in the U.S. has collapsed," says Fadel Gheit, the longtime Oppenheimer energy analyst. "That doesn't mean that they are wrong, because their investment horizon is not the same as Wall Street's." Tillerson believes that the shale investments will pay off for Exxon over 25 to 30 years, a point he emphasized to analysts in March when explaining the company's careful approach to developing its shale assets." -- CNNMoney

WTF? Doesn't Rex Tillerson get "Vag's" newsletter???

I guess not.

It does look like he has had some experience with douche bags like "Dufus" and "Adios" though:

"What I find interesting about the U.S. relative to other countries is in most every other country where we operate, people really like us. And they're really glad we're there. And governments really like us. And it's not just Exxon Mobil. They admire our industry because of what we can do. They almost are in awe of what we're able to do. And in this country, you can flip it around 180 degrees. I don't understand why that is, but it just is." -- Rex Tillerson

 
At 8/09/2012 8:37 PM, Blogger Hydra said...

I do better than 4% on the farm, when I am lucky.

 
At 8/09/2012 8:39 PM, Blogger Hydra said...

The US is a great country. Greatness has to be paid for.

 
At 8/09/2012 8:41 PM, Blogger Hydra said...

Who do natural resources belong to?

It is a fundamental question of property rights.

 
At 8/09/2012 9:30 PM, Blogger hancke said...

When I looked at leasing my land in the Barnett Shale I scoured the Yellow Pages and the Internet for a non-profit communal or co-op production company that would split the sale of my gas 50/50 without requiring me to front any capital or share any costs for a dry hole. Oddly I couldn't find one. I'm certain that business model will work if I can just find some like minded peolpe with money to spare.

 
At 8/09/2012 9:39 PM, Blogger Jon Murphy said...

I'm certain that business model will work if I can just find some like minded peolpe with money to spare.

Don't all business models work that way? :-P

 
At 8/09/2012 10:00 PM, Blogger hancke said...

The ones that actually start tend to work that way!

 
At 8/09/2012 10:19 PM, Blogger VangelV said...

WTF? Doesn't Rex Tillerson get "Vag's" newsletter???

Rex decided to abandon the shale gas development in Poland. If you wait a while you will eventually see Rex writing off most of the shale gas leases in the US because he can't make any money from production. But if you understood the regulatory rules you would understand that Exxon does not need gas production. It needs cover for its falling reserve levels. And the easy way to do that is to add fake shale reserves and use the 6:1 energy conversion ratio instead of the 30:1 price ratio. If the SEC forced companies to use a ratio that reflected market reality most of the conventional producers would dump all but the core shale areas.

 
At 8/09/2012 11:16 PM, Blogger Ron H. said...

"Of XOM's $31 billion in 2011 income tax expense, the feds received $1.55 billion and the states $0.48 billion for a total of $2.03 billion. That's 7% of the expense. So 93% of income taxes were to non-U.S sources."

Is there anything to be learned here about having the highest corp. tax rates in the world?

 
At 8/09/2012 11:23 PM, Blogger VangelV said...

Is there anything to be learned here about having the highest corp. tax rates in the world?

While I agree with you on the very high taxes Exxon has to go where the oil is and it isn't in the US any longer. American conventional production is way down from the 1970 peak and unconventional oil production is too expensive. That is why primarily Exxon takes huge risks and goes elsewhere but it would help if offshore areas were open to it and the other companies.

 
At 8/10/2012 8:18 AM, Blogger Hydra said...

That's 7% of the expense. So 93% of income taxes were to non-U.S sources."

Is there anything to be learned here about having the highest corp. tax rates in the world?

==============================
vange is right. The question does not follow from the premise.

 
At 8/10/2012 8:47 AM, Blogger morganovich said...

adios-

your comment seems the height of ignorance.

you think companies do not raise prices in response to income taxes, environmental taxes, health care taxes, etc?

any tax is an expense and companies will try to recoup as much of any of them as they can.

of course, they are limited by what consumers want to pay.

accusing others of lemminghood from a position of rank ignorance is no way to go through life son.

 
At 8/10/2012 9:04 AM, Blogger patriot451 said...

Are they including the gasoline taxes that human beings pay when they drive, that are used to maintain the roads and bridges? I think so.

 
At 8/10/2012 9:43 AM, Blogger VangelV said...

I wonder how this calculation works. So for instance I pay taxes at the pump. A portion of the gasoline expense is taxes. For Mark Perry does that me Exxon paid those taxes?

And excellent point. But the end result is still the same. The government gets a lot for doing and activity that it has a monopoly over. The taxes are generated by the activities of individuals and companies like Exxon.

 
At 8/10/2012 9:58 AM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

Seems folks here are ignoring the EXCISE taxes paid (one of the tax columns in the chart) -- by the customer at the pump. Not sure if this includes the SALES TAXES paid on gas in most states.

Nor is it likely this includes all the OTHER taxes paid by Exxon -- property, sales taxes on THEIR purchases not for resale, insurance taxes, payroll taxes, etc. -- plus endless fees. Nor does this aggregate tax figure include the taxes paid by SHAREHOLDERS when they profit (via dividents and/or capital gains) from their Exxon stock holdings.

 
At 8/10/2012 10:06 AM, Blogger marmico said...

Nor is it likely this includes all the OTHER taxes paid by Exxon -- property, sales taxes on THEIR purchases not for resale, insurance taxes, payroll taxes, etc. -- plus endless fees.

That's true of any business, so what's your point?

There is a provision in the tax code going back 50 years which allows oil companies to treat certain payments (e.g. royalties) to foreigners as tax credits rather tax deductions. This allows a 1:1 deduction against the domestic tax expense rather than 35 cents (statutory corporate rate) per dollar. It is estimated that this subsidy to the "Big Five" amounted to $6.5 billion in 2011. That subsidy should be eliminated.

 
At 8/10/2012 10:22 AM, Blogger baldrad said...

So another corporation collects taxes from the sheep and turns it over to THE GOVERNMENT CLASS, which blames the high cost of fuel/oil on the corporation.

And the sheeple buy the propoganda. Hilarious.

 
At 8/10/2012 11:40 AM, Blogger juandos said...

"The US is a great country. Greatness has to be paid for"...

Baloney hydra, you're pushing for over payment...

It sounds like you're having another Peggy Joseph moment...

 
At 8/10/2012 12:54 PM, Blogger Pete Smoot said...

I don't understand the comment by Adios: "An excise is considered an indirect tax, meaning that the producer or seller who pays the tax to the government is expected to try to recover the tax by raising the price paid by the buyer...". I don't see how this can happen.

The price is set by the market. You wouldn't buy gas at a higher priced station just because they told you "Oh it's OK, we're just passing on a higher excise tax." You'll just go down the street to the cheaper station.

The only thing the company really can decide is whether the price is high enough to generate enough profit after costs to be worth the risk. The excise tax is another cost the company has to cover, just like labor and raw materials.

 
At 8/10/2012 1:11 PM, Blogger Che is dead said...

"There is a provision in the tax code ... blah, blah, blah, ... That subsidy should be eliminated. -- marmico

It never ceases to amaze how the success of productive people, who actually contribute to the well being of humanity, inflames the hatreds of parasites.

 
At 8/10/2012 2:16 PM, Blogger Ron H. said...

"There is a provision in the tax code going back 50 years which allows oil companies to treat certain payments (e.g. royalties) to foreigners as tax credits rather tax deductions. This allows a 1:1 deduction against the domestic tax expense rather than 35 cents (statutory corporate rate) per dollar. It is estimated that this subsidy to the "Big Five" amounted to $6.5 billion in 2011. That subsidy should be eliminated.

You are essentially advocating higher taxes on oil companies. Who do you suppose ultimately pays all taxes? It will be mostly customers, but can also fall on employees and shareholders. There is no one else to pay them.

 
At 8/10/2012 2:41 PM, Blogger Mkelley said...

The public are mostly clueless about taxes and business. A guy at work who gets his news from tv said that Exxon et. al. should just drop gas prices by a dollar to help the economy. My protestation that they only make 7 or 8 cents a gallon profit fell on deaf ears. Lefty ideas, though nuts, thrive in such a low-information environment.

 
At 8/10/2012 2:51 PM, Blogger marmico said...

che is such a crony capitalist he wouldn't know a level playing field between a pure domestic and a hybrid fossil producer if it smothered him in butane.

The elimination of the subsidy, which is a rounding error in the "Big 5" financials, should incent more domestic E&P.

 
At 8/10/2012 2:58 PM, Blogger Ron H. said...

Pete Smoot:

"I don't understand the comment by Adios: "An excise is considered an indirect tax, meaning that the producer or seller who pays the tax to the government is expected to try to recover the tax by raising the price paid by the buyer...". I don't see how this can happen."

That's OK, Adios didn't understand it either.

 
At 8/10/2012 3:18 PM, Blogger Ron H. said...

"che is such a crony capitalist he wouldn't know a level playing field between a pure domestic and a hybrid fossil producer if it smothered him in butane."

Ah, the old "level playing field" card has been played.

The only possible "level playing field" is one in which there is no government interference of any kind. Then actors succeed or fail entirely on their own merit as judged by those who buy their products. What could be more fair than that?

Attempts to create a mythical level playing field invariably work against the interests of consumers.

"The elimination of the subsidy, which is a rounding error in the "Big 5" financials, should incent more domestic E&P."

Your earlier comment claimed this "subsidy" resulted in a tax savings to the Big 5 of $6.5 billion, as if to say that's a large amount, but now it's a rounding error. Is it a big deal or not?

Can big oil companies afford to pay more because they're "rich"?

Why do you believe a tariff on imported oil - which is essentially what you're recommending - is good for US consumers?

 
At 8/10/2012 3:22 PM, Blogger Ron H. said...

Mkelley:

"Lefty ideas, though nuts, thrive in such a low-information environment."

I'm not so sure it's a low-information environment so much as a low accurate-and-useful-information environment.

 
At 8/10/2012 4:00 PM, Blogger Che is dead said...

"che is such a crony capitalist he wouldn't know a level playing field between a pure domestic and a hybrid fossil producer if it smothered him in butane." -- marmico

Save your breath, you'll need it to blow up your girlfriend.

 
At 8/10/2012 5:26 PM, Blogger Zachary Azeez said...

Looks like we're getting closer to the day when the big corporations say "See yah" and form their own countries.

 

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