When oil prices blew sky high in 2008, ExxonMobil paid $36.5 billion in income taxes, $34.5 billion in sales taxes, and $45 billion in other taxes, for a total of $116.2 billion in taxes paid and collected in 2008. That’s according to Mark Perry at the Carpe Diem blog.
Exxon will report earnings later this week. And while oil prices aren’t quite as high today as they were three years ago, it’s all a bit like 2008.
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I read somewhere that either Exxon or the whole oil industry pays more in taxes than the bottom 50 percent of the whole income-tax system. So while president Obama is out there ragging on oil companies to remove so-called tax subsidies, it’s odd that he doesn’t mention how much in taxes the energy firms actually pay to Uncle Sam.
There’s a laundry list of tax credits that go to oil, both large and small firms. Basically, these tax credits allow for the expensing of high-risk investment. That’s what this is about.
Of course, if you really wanted to stop expensive subsidies, you’d kill the ethanol subsidies that have a big carbon footprint and drive corn and wheat prices sky high. But the liberal-left progressives hate oil and gas companies, period. That’s really what all this is about.
Ironically, besides the usual plea for wind, solar, and biofuels — which amount to virtually nothing in terms of our energy use — the president does include natural gas. But natural gas is produced by oil and gas companies. And you have to drill for it. Therefore, oil expenses in the whole drilling process — including leases, permits, geology research, and dry holes, and then drilling, producing, lifting, and ultimately refining for sale — should be 100 percent expensed.
So it would be great if the president understood that you have to drill for natural gas. It also would be great if the president and his pals, instead of harping on a measly $4 billion a year in so-called subsidies (compare that with a $1.5 trillion deficit), focused on real pro-growth corporate-tax reform that drops the rates and includes permanent 100 percent expensing.
That’s pro growth. That’s tax reform. That will create more oil, more natural gas, and more gasoline. That would probably stabilize prices, assuming the Fed doesn’t totally destroy the dollar. That would generate millions of new jobs and lower unemployment. And that would be a good policy.
– Larry Kudlow, NRO’s Economics Editor, is host of CNBC’sThe Kudlow Report and author of the daily web blog, Kudlow’s Money Politic$.
O and his cohorts WANT the price of oil to be painfully high. They believe that is what it takes to get Americans to switch to soar, wind, and petting rabbits.
All of us not living in an ivory tower realize this is a little like motivating you to use your left arm more by cutting off your right arm. The patient will never recover.
That is why obama won't do anything you suggested be done, and will do everything you suggested not be done. So far you are 100% in disagreement with the Obama plan, and I am 100% in agreement with the Kudlow plan, too bad you nor I have a say, and it's all Obama until 2013.
You are so right! Liberals have no idea about how oil companies work.
Exxon had $404 billion in revenue in 2008 and distributed a mere $40 billion to shareholders. Yet it had to pay Uncle Sam $41 billion in Federal income tax, that’s a whopping 9% of its revenue but 47% of its profits; that’s outrageous.
And all this while higher prices drove down demand. Yet, despite this difficulty Exxon did manage to spend an average $0.66 for finding and acquiring per barrel of oil.
Fortunately it was able to buy back $35.7 billion in Exxon stock in 2008 with its meager cash flow. Probably helped by tax cuts and federal subsidies, but Exxon needs that to continue serving its shareholders and its customers, especially if it wants to retain its 60% world market-share.
Though I tried, I couldn’t find any reference to those $34.5 billion in sales taxes, and $45 billion in other taxes in the Exxon’s 2008 annual report, but I’ll take your word for it.
Yep, anyone who thinks oil companies are making obscene profits at the expense of Americans are just… well, un-American.
Larry, sometimes your readers need to be reminded that big oil companies are owned by millions of Americans either in their mutual funds or shares in the companies.
The lack of a realistic energy policy is the real culprit here. The green machine is getting rich off Obama's ignorance
If the US finds a way to get rid of "big oil" companies, who do they think will supply oil for the US? Do you think that the national oil companies of the countries that own the oil will care about the US? I seriously doubt it.
Actually the lion's share of oil companies is owned by their employees. ExxonMobil's thrift plan encourages stock ownership by matching funds. Also, oil companies are the most unionized in the country and probably pay the highest wages. But, to the left, we are still in the dark ages of robber barons.
I think the attempt at facetiousness was lost somewhere in cyberspace. I agree completely with Larry's and your assessment that the Left hates privately owned oil companies. They hate anything they can't control.
I ask the question, then, does being state-owned make these oil companies the salt of the earth, worthy of the Left's admiration, and not contempt.
"a total of $116.2 billion in taxes paid and collected in 2008"
A clarification should be made here. ExxonMobil didn't pay this amount to the feds, they collected it from their customers. I'd like to divide this number by the number of gallons of gasoline they sold that year to see what it cost the consumer additional at the pump.
Now, if we could only get O'Reilly to read this. He falls into the Democrat Party of Death trap every time on the issue of evil oil companies conspiring to shaft the folks.
I doubt that ExxonMobile paid nearly as much as $35 billion in taxes to IRS. In fact, big companies like Exxon or GE are able to get almost complete tax breaks, by using overseas subsidiaries.
That means that the net tax gain for Exxon may well be negative, since it gets billions of subsidies from the taxpayers.
As for the question, I think that big oil's funding of global warming denialism propaganda, human rights violations and corruption in the 3rd world, fighting against environmental protection etc. have made many people rather suspicious of this business.
The left believes all power should reside in govt, and that they should be in charge of that govt.
The left hates anyone who has power or influence that they don't control.
August, for someone who wants others to check their facts, you are surprisingly short on facts yourself.
What subsidies? Are you refering to tax breaks that the oil companies get? There are no other subsidies. Those tax breaks were dealt with in the article.
As to your claims that oil companies fund AGW deniers, that's a lie. One company gave one $25K check to a group, that group, amongst it's many other activities, provides information regarding the AGW scammers.
As to the rest of your immature rantings, they are equally weak, if not out right wrong.
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