published Wednesday, July 11th, 2012

Big oil pays its 'fair share'

President Obama has been talking an awful lot about fairness lately.

Recently he said that he was in a better position than rival Mitt Romney to make sure that "everybody in the country has a fair shot" and that "everybody's paying their fair share." The President singled out the oil industry for particular criticism, claiming that the sector gets too many federal tax breaks.

It's true -- oil companies don't pay their fair share. They pay more.

And absent major changes in the way this country taxes corporations, there may not be any more companies -- oil or otherwise -- for the federal government to tax.

The top corporate income tax rate in the United States is 35 percent. Yet America's three largest oil companies -- ExxonMobil, Chevron, and ConocoPhillips -- pay taxes in excess of 40 percent. ExxonMobil pays 45 percent, shelling out over $12 billion in federal taxes in 2011.

Fair, low corporate tax rates generate economic growth, produce jobs, and make goods and services cheaper for consumers.

Apparently, the United States is the only country in the world that hasn't gotten the memo. Over the past decade, the global average corporate tax rate dropped from 32 percent to 25 percent, while the U.S. rate remained exactly the same. Consequently, America now has the highest corporate tax rate in the industrialized world.

Our stiflingly high rate is bad enough. But the federal government also taxes U.S.-based companies on money they make in foreign countries in addition to income earned domestically. We're one of the only countries in the world to do so.

Unsurprisingly, many business leaders are considering leaving America for countries with lower tax rates on domestic earnings and little to no tax liabilities on income earned abroad. Some already have.

The U.S. corporate tax structure doesn't just kill American jobs. It also plays favorites. In recent years, federal lawmakers have showered preferred industries and companies with tax breaks and other preferential treatment.

As a result, seemingly every corporation faces a different tax rate, depending on how much lawmakers like them, how good their lobbyists are, and how well they're able to exploit tax shelters.

For instance, America's 20 most profitable companies paid an average of 25.4 percent in taxes in 2010. In the same year, General Electric paid just 7.4 percent. And last year, Apple paid 9.8 percent. Almost every company in the United States pays a lower tax rate than oil companies.

And what do politicians do with the extra cash they extract from oil companies? They subsidize the industry's competitors.

In 2011, the federal government gave away $16 billion in taxpayer dollars to subsidize non-traditional energy schemes. Included in the handouts were a $6 billion giveaway for ethanol companies and millions more to bankroll solar-energy companies like the infamous -- and now-bankrupt -- solar-panel maker Solyndra.

It's the stated goal of many of these alternative energy firms to put oil companies out of business. That's all well and good. But they shouldn't get a multibillion-dollar assist from taxpayers.

Only the federal government could see the "fairness" in taking a hefty slice of the oil industry's revenues as taxes and using it to fuel the sector's downfall.

Oil companies may make for convenient -- and politically popular -- targets. But the fact is that they pay more than their fair share in taxes. Lawmakers should direct their energies instead toward fixing America's expensive and uneven corporate tax system -- before it drives any more companies and jobs out of the country.

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And then you look at the costs of maintaining military operations in the Middle East, and suddenly Oil becomes a lot less cost-effective. How many billions has that been? Not to mention thousands of lives?

But where are you getting your numbers from? Others say Exxon Mobile's Tax rate was 13% not 45%.

http://thinkprogress.org/climate/2012/03/26/452213/exxon-mobils-tax-rate-drops-to-13-percent-after-making-35-percent-more-profits-in-2011/

I'm going to ask you to show your work, and not just take Exxon or whoever shill they're expecting you to believe at their word.

Nah, can't do that.

July 11, 2012 at 1:24 a.m.
anniebelle said...

Gulf Oil Spill Multimedia Collection Transocean, moved its corporate headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland in 2008, maneuvers that also helped it avoid taxes. At the same time, BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon — a deduction of more than $225,000 a day since the lease began. With federal officials now considering a new tax on petroleum production to pay for the cleanup, the industry is fighting the measure, warning that it will lead to job losses and higher gasoline prices, as well as an increased dependence on foreign oil. But an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process. This new ‘editor’ has filled his columns with lies, half-truths and idiotolgy to try to confuse those that know really don’t know the facts and are easily confused by something they read in their newsFreePress. It’s a pity we don’t have facts to rely on in our day to day lives so we don’t have to digging for the truth, most people don’t have the time in their busy lives, some working two or three jobs just to buy groceries.

July 11, 2012 at 6:52 a.m.
chatt_man said...

Yeah, anniebelle, it's a horrible economy. Some people ARE working two or three jobs to buy groceries.

But, Obama and Bush are doing all they can...

July 11, 2012 at 10:22 a.m.
anniebelle said...

To hear conservatives and Tea Partiers tell it, President Obama is a serial tax-raiser who has increased taxes on “millions of Americans.” But according to the latest data from the Congressional Budget Office, tax rates under Obama hit a 30-year low in 2009, in part because of the tax cuts he implemented in response to the country’s economic downturn: Americans paid the lowest tax rates in 30 years to the federal government in 2009, in part because of tax cuts President Obama sought to combat the Great Recession, congressional budget analysts said Tuesday. [...] During Obama’s first year in office, the average tax rate paid by all households fell to 17.4 percent, down from 19.9 percent in 2007, according to the CBO. The 2009 rate was significantly lower than the previous low of 19.4 percent in 2003 and well below the 30-year average of 21 percent. Now, Obama is proposing to raise tax rates on income in excess of $250,000 (which would still keep tax rates for the rich below where they were under the Clinton administration). And of course, Republicans are breaking out every falsehood in the book in order to oppose the move.

July 11, 2012 at 3:13 p.m.
conservative said...

Most people seem to understand that rising corn prices result in higher food prices but they don't blame the grocery stores.

Most people don't seem to understand that higher corporate taxes on oil companies will raise the price of gasoline because they blame the "greedy" oil companies.

Maybe the gas fumes are dumbing them down.

July 12, 2012 at 6:42 p.m.
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