Despite $41 Billion in Profits Last Year, Exxon Pays a Lower Tax Rate Than You
Despite being one of the largest, most profitable companies on the planet, ExxonMobil continues to pay taxes at a lower rate than the average American. ThinkProgress reports that the oil giant, which just released its Q4 earnings from last year, made $41 billion in 2011—that's up 35% from 2010.
But remember, Exxon only pays an average tax rate of 17.6%, which is less than the average American, who pays 20%. (TP does point out, humorously, that Exxon pays a higher rate than Mitt Romney, who gets away with a crazy low 13.9% rate on his capital gains) And since corporations are treated as persons in the eyes of a law, that just doesn't seem fair. The top marginal tax rate for individuals, after all, is 35%.
So how does Exxon get away with paying such a relatively low rate? Along with other oil companies, it enjoys the rather generous tax breaks and subsidies the federal government—and the American taxpayer—sends its way. The Institute for Policy Integrity has set up a new Wiki that reveals information about many of these breaks, and how much money they help oil companies save.
Combined, those subsidies and tax breaks, some of which have been in place for nearly a century, cost taxpayers billions of dollars every year—all to help pad the earnings of some of the wealthiest, most profitable companies in existence. And what does that extra cash help a company like Exxon do?
Well, in 2011, it might have allowed Exxon to spend $13 million lobbying Congress, helping the company do things like defeat clean energy legislation and, well, maintain its tax advantages. And so the vicious cycle continues ...