Last week, the false claim that ExxonMobil paid “zero taxes in 2009” made another appearance in the political arena. The facts don’t support this claim, but for many it proves too good to pass up when engaging in political theater.
Claims that ExxonMobil did not pay taxes in 2009 are just plain incorrect. The myth started with a misreading of our 2009 10-K filing with the Securities and Exchange Commission, and it’s now being perpetuated for all kinds of reasons.
So, let me set the record straight.
In 2009 specifically, ExxonMobil’s total taxes and duties to the U.S. government and its subdivisions exceeded $7.7 billion, an amount that includes ExxonMobil’s U.S. income tax expense related to 2009 activities of approximately $500 million. Our U.S. income tax expenses over the last five years alone reach almost $20 billion.
Furthermore, one only has to look at ExxonMobil’s previous tax bills to realize that any claim we don’t pay taxes is absurd.
ExxonMobil is one of the country’s largest taxpayers, having incurred a total U.S. tax expense of $60 billion over the past five years – a tax cost that exceeded our U.S. earnings in that same period by $19 billion. Simply stated, for every dollar of net earnings in the U.S. between 2005 and 2009, we paid almost $1.50 in taxes to federal, state and local governments.
We are not only a large source of revenue for the government through taxes, but we also continue investing substantial sums even in a weak economy. While others have cut back, ExxonMobil made capital and exploration investments of $26.1 billion in 2008 and $27.1 billion in 2009. We invested nearly $11 billion directly in U.S. operations during this time, generating jobs and other economic benefits.
And for those who still say oil and natural gas companies “don’t pay their fair share” compared to other companies, consider this: ExxonMobil’s effective tax rate for 2009 was about 47 percent; a recent study found that the tax rate for U.S. oil and gas companies is about 20 points higher than the rest of the S&P Industrials. I’d consider that more than our fair share.
ExxonMobil’s activities add billions of dollars a year to the U.S. economy through our tax obligations and our business investments, and federal, state, and local government budgets all benefit.
When it comes to political theater, it’s time for a new line – because the old line about ExxonMobil not paying taxes just isn’t true.