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.
- 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.