Senator Bernie Sanders of Vermont has tweeted:
Last year Exxon made $19 BILLION in profit. Guess what? They paid zero in taxes & got $156 mill. refund from the IRS.
This is technically accurate but very misleading. Exxon Mobil (XOM) paid zero federal taxes but they indeed had a massive tax bill last year.
Before taxes, XOM recorded a profit of $34.8 billion. They paid $15.1 billion in taxes to foreign countries. The U.S. tax code allows them to deduct that tax bill from what’s due to the IRS.
Exxon paid the most taxes last year of any U.S. company, by far — but not a cent went to the IRS for income taxes. That’s because the oil giant does business in some of the mostly highly taxed countries in the world. Want to extract petroleum in Nigeria? Be prepared to fork over up to 85% of your profit in tax payments.
Exxon doled out more than $15 billion in income tax payments to foreign countries last year. U.S. tax codes allow companies to take massive deductions in light of those international charges, which knocked Exxon’s federal income-tax bill down into negative territory.
That said, Uncle Sam gets his money in other ways. Including sales taxes and duties, Exxon recorded $7.7 billion in U.S. tax costs last year, and paid even more overseas.
Its grand total in global taxes for the year? A whopping $78.6 billion. The company’s effective income tax rate was a hefty 47%, its highest in three years.
Posted by Eddy on November 30th, 2010 at 1:46 pm
Named by CNN/Money as the best buy-and-hold blogger, Eddy Elfenbein is the editor of Crossing Wall Street. His free Buy List has beaten the S&P 500 for the last four years in a row. (more)
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