To hear President Barack Obama in last night’s first presidential debate, you would think he was running against ExxonMobil this November given his tendency to single us out for criticism.
In a discussion of ways to address the federal deficit, the president repeated incorrect claims that ExxonMobil receives what he termed “corporate welfare.”
Because we’ve been pulled into this debate, I feel like asking the moderator to let me respond with several points.
The first is that ExxonMobil receives no special treatment in the U.S. tax code.
What the president often calls subsidies for “Big Oil” are legitimate tax provisions that apply to virtually all American manufacturers and producers. In fact, companies like ExxonMobil actually are specifically disadvantaged: The oil and gas industry deduction under section 199 of the tax code, for instance, is lower than the deduction allowed for nearly all other U.S. manufacturers.
The president has said he wants to remove these provisions for the oil and gas industry entirely – a punitive proposal that would do nothing except raise the cost of producing the energy that America needs to support economic recovery.
Keep in mind, too, that ExxonMobil’s U.S. tax expense amounts to more than $1 billion per month. In 2011, our total U.S. taxes of $12.3 billion exceeded our U.S. earnings by almost $3 billion, and our effective income tax rate in the U.S. was 31.4 percent – far higher than many critics have claimed. We are a large corporation with a disciplined business approach that has generated substantial earnings for our shareholders as well as energy for millions of U.S. consumers. Our earnings may be large – but so are our taxes.
Finally, there’s one more thing we do with the money we earn: We re-invest it. ExxonMobil plans to spend close to $37 billion for each of the next five years on forward-looking projects to develop the energy supplies the world will need in the decades to come.
Much of that money will be spent right here in the United States, which is why the Progressive Policy Institute recently hailed ExxonMobil as an “Investment Hero” for our substantial U.S. capital investments.
Misleading attacks on oil companies like ExxonMobil have become a staple of some candidates during election time. And while such an approach may produce sound bites for the evening news, they do nothing to provide voters with the fundamental facts about the U.S. energy industry or the many ways we contribute to our nation’s economic growth, public treasury and international competitiveness.
