What Exxon really pays in taxes
Wednesday May 4, 2011
NEW YORK (CNNMoney) -- Exxon Mobil wants to tell you something: It pays taxes. A lot of them.
In the first months of this year, Exxon (XOM, Fortune 500) says it paid $3.1 billion in taxes in the United States -- more than even the $2.6 billion in profit it made selling oil and gas.
To get to that number, the company includes the federal and state gasoline taxes that the company collects from drivers and passes on to government coffers. It also includes payroll taxes the company pays on behalf of its employees.
The company is highlighting its overall tax contributions to make a point: It wants Americans to see just how much the company and its activities add to the overall tax rolls.
"We are one of the largest taxpayers in the United States," said Alan Jeffers, an Exxon spokesman.
For Exxon -- and the oil industry overall -- the message is urgent.
Led by President Obama and key Democratic lawmakers, Congress is pushing to eliminate $4 billion a year in tax breaks enjoyed by the oil industry. With gas at $4 a gallon, it's not a popular time for politicians to defend oil industry subsidies. Even some top Republicans have recently suggested they might support eliminating the breaks.
Critics say Exxon Mobil and the industry is going too far in making its argument.
"They are counting taxes they don't pay," said Bob McIntyre, a director at Citizens for Tax Justice. "Payroll taxes are on the workers, sales taxes are on the consumers."
Throwing in those seemingly superfluous tax figures seems like an unnecessary move, especially considering that even without them the income tax the company pays is pretty high.
Exxon's average effective U.S. income tax rate over the last six years is about 29%, according to the firm's security filings and an interview with a top Exxon tax lawyer. It's one of the highest rates for any industry.
Jeffers said the company highlighted its overall tax contributions because it's important for people to see just how much the firm and its activities add to the overall tax rolls.
Exxon's income tax rate is below the 35% rate mandated by corporate tax law, but it's widely believed most U.S. companies don't pay that rate thanks to generous loopholes in the tax code.Big Oil's $38 billion defense
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