Forbes: Big Oil = Biggest Taxpayers

Check out this informative post by Forbes’ Christopher Helman, who notes that Nos. 1, 2 and 3 on the magazine’s list of companies that paid the most in income taxes in 2011 were … energy companies.

That might surprise some people, given White House rhetoric about oil and natural gas companies not paying their “fair share.” It turns out Big Oil is the country’s Biggest Taxpayer. Here’s how Forbes’ data looks in a chart:

As you can see by the blue line, ExxonMobil ($27.3 billion), Chevron ($17.4 billion) and ConocoPhillips ($10.6 billion) occupy the top three spots in Forbes’ income-tax-paying ranking. Occidental Petroleum comes in at No. 18 ($2.9 billion).

Now check the chart’s red line. It shows that all four energy companies’ effective tax rates topped 40 percent – ExxonMobil 42 percent, Chevron 43.3 percent, ConocoPhillips 45.6 percent and Occidental 40.2 percent. Helman:

“And income taxes isn’t even the half of it–literally. Exxon also recorded more than $70 billion last year in sales taxes ($33.5 billion) and other taxes and duties ($43.5 billion). But none of that will matter to the president if gasoline prices keep climbing. Having been blocked on his Big Oil tax hike, don’t be surprised if in the heat of the summer driving season he calls for a windfall profits tax on oil companies. The very concept implies that the companies are earning an unfairly high return. Sure Exxon’s and Chevron’s net incomes are high. But so are their revenues! Exxon’s revenues were $486 billion and Chevron’s were $254 billion. That implies an average net margin of just 10%.”

Helman continues:

“Compare that with the $33 billion that Apple made in 2011 on $128 billion in revenues and Microsoft‘s $23 billion income on $72 billion in sales. Those margins are 26% and 32%. And yet Apple enjoyed a low effective tax rate of 25% and paid a relatively meager $4 billion in income taxes, putting it in ninth place on our list of the biggest U.S. corporate taxpayers, while Microsoft had an effective rate of just 16% and paid $5.3 billion, placing it sixth.”

The point is that America’s oil and natural gas companies pay their fair share, more than $86 million a day in rents, royalties and income taxes, yet regularly are singled out by the administration for tax increases – the unfairness of which doesn’t seem to register with a White House that spends so much time talking about fairness.

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