Exxon Earns Huge Profits, But Also Pays Huge Taxes
As you are paying record prices for gasoline and watching that cost increase weekly, the world’s largest oil company, Exxon-Mobil is reporting near-record profits in the first quarter of 2011.
Before you start chanting anti-Exxon slogans, you should know that only 3% of the oil company’s profits come from the U.S. They are a global company with a diverse revenue base. To give us the big picture on this, Ken Cohen, vice president of public and government affairs for Exxon Mobil Corporation has posted some details about the company;
Less than 3 percent of ExxonMobil’s earnings are from U.S. gasoline sales
ExxonMobil’s earnings are from operations in more than 100 countries around the world. The part of the business that refines and sells gasoline and diesel in the United States represents less than 3 percent – or 3 cents on the dollar – of our total earnings. For every gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That’s not a typo. Two cents.
Wow. While Exxon Mobil squeezes a couple of pennies out of each gallon of gas, the U.S. government does a bit better. The government rakes in somewhere between 40-60 cents in taxes from each gallon of gas. And since the government spends ZERO dollars to sell that gasoline, their profit margin is 100%.
More from the Exxon Mobil report;
The main component of the price at the pump is the cost of a barrel of crude oil. Another major component of the price of gas is state and federal taxes, which range from a high of 66 cents per gallon in California to a low of 26 cents per gallon in Alaska, according to January 2011 data.
The oil giant must have remembered Congresswoman Maxine Waters’ 2008 comments about socializing oil companies, because they also released some additional financial information to clarify just how they make their money.
ExxonMobil’s earnings are in line with the industry average
In 2010, ExxonMobil made less than 8 cents for every dollar of revenue from all of our businesses around the world. That’s less than half of companies selling pharmaceuticals, beverages, tobacco and computers, just to name a few. On a dollar-for-dollar basis, our earnings, and those of the U.S. oil and gas industry at large, are generally in line with the average earnings of all U.S. industries.
It is doubtful that Rep. Waters will be swayed by something like the facts. We remind you of the Congresswoman’s comments during the last run-up of oil and gas prices:
Ms.Waters has been silent, but former speaker Nancy Pelosi fired off a letter to Speaker John Boehner almost immediately;
“Two weeks after Republicans voted to end Medicare as we know it in order to give tax breaks to Big Oil, Exxon is now reporting soaring profits.
“There is no reason American taxpayers should subsidize Big Oil’s profits. This week, Speaker Boehner said that oil companies should pay their fair share; it’s now time for him to make good on that statement and schedule a vote next week on ending taxpayer subsidies to Big Oil.
“It’s time to turn off the spigot of public funds flowing to Big Oil; to invest in clean energy and reduce our dependence on foreign oil; and to create jobs while we responsibly reduce our deficit.”
Ms. Pelosi seems to have glossed over the fact that Exxon also paid almost $10 billion dollars in U.S. taxes last year alone, and just under $59 billion in the past five years.
Unlike the corporations like GE that admit to paying zero tax, Exxon Mobil appears to be supporting the U.S. economy reasonably well.
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