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ExxonMobil tax facts – the ones you won’t see in the news

In the lead up to “Tax Day,” you’ve likely already seen media reports with all kinds of facts and figures about what individuals and companies owe in taxes.

ExxonMobil’s taxes are, not surprisingly, a favorite subject of debate. So I thought I would share a few facts – the ones you likely won’t see in the news.

    • In 2011, ExxonMobil’s U.S. tax expenses totaled more than $1 billion a month on average. That’s more than $12 billion in U.S. taxes in 2011 at all levels – local, state and federal – and of all types – income taxes, property taxes, sales-based taxes, excise taxes and more.
    • Our U.S. taxes in 2011 exceeded our U.S. earnings by more than $2.5 billion. When you hear our earnings total, you usually hear the global figure. But in a discussion about U.S. taxes, our U.S. operating earnings total is what applies – and that was $9.6 billion in 2011.
    • Over the last five years, ExxonMobil’s U.S. taxes have totaled more than $57 billion – about $18 billion more than our U.S. operating earnings during that period. That means that for every dollar our shareholders earned from our U.S. operations, government taxes totaled almost $1.50.

These are just our U.S. tax stats – when you include those from our operations around the world, our 2011 taxes totaled well more than $100 billion. And while critics like to break down our global earnings by the hour, they usually don’t point out that ExxonMobil’s global taxes were $12.3 million an hour, and it took more than $47 million an hour to run the global business.

Of course, these facts are rarely the ones you hear about. Apparently, it isn’t news when a company is continuously one of the leading corporate taxpayers in the United States. But strangely it is “news” to perpetuate false claims about what ExxonMobil pays in taxes, or false claims that oil companies like ExxonMobil receive “subsidies” from U.S. taxpayers.

While the media and the public like to zero-in on who-pays-what in taxes, taxes are not the sole measure of a company’s value to the U.S. Treasury or the U.S. economy.

Companies hire people (who spend and pay taxes) to keep the business running; companies hire other companies (who spend and pay taxes) to do specialized work for them; companies purchase raw materials and goods from other businesses (who spend and pay taxes) to make their products – you can probably see my point. The economic payoff from creating demand for jobs, goods and services is far greater than any one company pays in taxes.

For example, in 2011 alone, ExxonMobil contributed $72 billion to the U.S. economy through activities including taxes, salaries, returns to our investors and payments to other businesses and industries to keep our U.S. operations running. That’s an average of almost $200 million per day pumped into the U.S. economy, and it doesn’t even include the indirect effect of such spending.

The cumulative effect of U.S. oil and natural gas activities accounted for more than $1 trillion of value added to the U.S. economy a year, and about 7.7 percent of U.S. GDP, according to latest data available.

Taxes are important, but they are just one piece of a much bigger picture when it comes to the U.S. economy.


6 Comments

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  1. Alexander Moyes says:

    Ken, another great article. I really appreciate hearing these facts, because your right, this kind of news will likely never be reported in the media.

    It’s sad we live in a time where the largest contributors, corporations and individuals alike, are the ones who are demonized and told they aren’t doing enough. Often times the finger pointing comes from those who contribute little or nothing….which is a very convenient way to live and they want to keep it that way.

  2. Jeff Romeo says:

    Ken, good article. It’s unfortunate when the press and politicians demonize highly profitable companies simply because they provide a necessity to the public but have nothing but praise for companies who make no secret of gouging the public on luxury items (even when questionable labor practices are involved in their production).
    That aside, I do have a question about your article. Did you include the Federal and Local gas pump taxes in your calculation of XOM’s U.S. tax burden? If so I’d like to see what XOM’s U.S. tax burden is without the pump taxes.

    • warren miller says:

      Why is it when we look at Exxon, we can look at a full balance statement; income and expenses down to the penny and analyse their relationships? But when we look at the corporation of the US Government we cannot look at all income streams and expenses in a complete balance statement? 54% of the people pay personal income tax and 46% not only don’t some get money back anyways. Demonizing big business is just a way to keep the masses fighting each other so they do not see the demonizing government for what politicians have turned it into.

  3. warren miller says:

    I believe the barrel price of oil is distributed like this: 75% goes to the oil producer as in Saudi Arabia or Venezuela, etc. Taxes are about 17% and only 8% goes to the oil company. The oil company gets the oil out, ships it, refines it, distributes it, and then makes profit from this 8%. Exxon should be recognized for not only the taxes they pay but the management of running a company on 8%!

  4. Mary Bawa says:

    I was surprised to see that Forbes had actually published an article about how much ExxonMobil pays in taxes:
    http://www.forbes.com/sites/christopherhelman/2012/04/16/which-megacorps-pay-megataxes/

  5. bloom lake says:

    This is a good article from the oil company perspective. However the tax issues are not fully answered. The Oil is a natural resource of the land and the environment. Oil and mining companies can not be compared to manufacturing (GM, Ford) or Technology Companies (Apple, Microsoft). Most countries treat Oil companies as not for profit company to the benefit of the end users and consumers. Oil prices and interest rates affects overall productvitity and the economic output globally especially in the USA. Excessive profits at Oil companies drains the total economy, and it does not matter how much taxes are paid. Simply put, the higher taxes paid by Oil company then higher taxes are paid by the people.
    Unfortunately, Exxonmobil pays nearly 2/3 of their taxes abroad, and hence US govt need to regulate Oil prices, just as they regulate interest rates at banks. Most people can do without highpriced Ipad (Choices) , but not without highpriced oil (No other Choice).

  6. Alexander Moyes says:

    Ken, another great article. I really appreciate hearing these facts, because your right, this kind of news will likely never be reported in the media.

    It’s sad we live in a time where the largest contributors, corporations and individuals alike, are the ones who are demonized and told they aren’t doing enough. Often times the finger pointing comes from those who contribute little or nothing….which is a very convenient way to live and they want to keep it that way.

  7. Jeff Romeo says:

    Ken, good article. It’s unfortunate when the press and politicians demonize highly profitable companies simply because they provide a necessity to the public but have nothing but praise for companies who make no secret of gouging the public on luxury items (even when questionable labor practices are involved in their production).
    That aside, I do have a question about your article. Did you include the Federal and Local gas pump taxes in your calculation of XOM’s U.S. tax burden? If so I’d like to see what XOM’s U.S. tax burden is without the pump taxes.

    • warren miller says:

      Why is it when we look at Exxon, we can look at a full balance statement; income and expenses down to the penny and analyse their relationships? But when we look at the corporation of the US Government we cannot look at all income streams and expenses in a complete balance statement? 54% of the people pay personal income tax and 46% not only don’t some get money back anyways. Demonizing big business is just a way to keep the masses fighting each other so they do not see the demonizing government for what politicians have turned it into.

  8. warren miller says:

    I believe the barrel price of oil is distributed like this: 75% goes to the oil producer as in Saudi Arabia or Venezuela, etc. Taxes are about 17% and only 8% goes to the oil company. The oil company gets the oil out, ships it, refines it, distributes it, and then makes profit from this 8%. Exxon should be recognized for not only the taxes they pay but the management of running a company on 8%!