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"Yes, in the eleven-year period FY2004 through FY2014, ExxonMobil paid literally over $1 trillion ($1.05T) in U.S. and international taxes, by far the largest single taxpayer in America."
5 MIN READ - The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff examines Joe Biden’s recent criticism of Big Oil using kryptonite for politicians: math. Prepare for the factual financial statistics from American energy and tech firms instead of fictitious blabber from elected bureaucrats.
During a speech at the Port of Los Angeles Joe Biden recently blamed, once again, Big Oil and “corporate greed” for high gas prices and overall price inflation.
Calling out one company by name this time, Biden complained that “ExxonMobil made more money than God last year” and closed out his remarks by ordering the diversified energy supermajor to “start paying your taxes!”
This is of course just another of multiple salvos bashing America’s world-leading energy industry alongside a posse of Democratic politicians attacking Big Oil’s “record profits” to heat up the bloodthirst of their political base.
But the Economics Correspondent would like to ask two simple questions:
Q1. Have any of these politicians, Biden included, actually gone back and looked at oil companies’ past financials before accusing them of posting “record profits?”
Q2. Has ExxonMobil not “started paying taxes?”
Fortunately, the Economics Correspondent routinely accesses years’ worth of SEC-filed corporate 10-K financial reports, standardized accounting that any competent politician could look up with a Google search if they had the intelligence or principled honesty to bother.
Let's compare the rhetoric to the financial reality.
1) “More money than God”
First there's Joe Biden’s complaint that “ExxonMobil made more money than God last year.”
Yes, after posting a record $22.4 billion loss in FY2020, ExxonMobil's results recovered in FY2021, recording net income of $23.0 billion.
That $23.0 billion net profit was what remained after ExxonMobil first paid $62.5 billion in total taxes (income, sales-based, duties, and other taxes) for a final net profit margin of 8.0%.
Source:
But if ExxonMobil's final profit is “more money than God,” then several big tech firms must be “Supergods” in Biden’s book.
Here's how much net income some leading tech firms posted in 2021, plus their tax bills:
-Apple: Net income: $94.7 billion, Taxes paid: $14.5 billion, Net profit margin: 25.9%
-Microsoft: Net income: $61.3 billion, Taxes paid: $9.8 billion, Net profit margin: 36.5%
-Google: Net income: $76.0 billion, Taxes paid: $14.7 billion, Net profit margin: 29.5%
-Facebook: Net income: $39.4 billion, Taxes paid: $7.9 billion, Net profit margin: 33.4%
And again, for comparison purposes…
-ExxonMobil: Net income: $23.0 billion, Taxes paid: $62.5 billion, Net profit margin: 8.0%
Big Tech financials sources:
https://www.apple.com/newsroom/pdfs/FY21_Q4_Consolidated_Financial_Statements.pdf
https://www.microsoft.com/en-us/Investor/earnings/FY-2021-Q4/press-release-webcast
https://abc.xyz/investor/static/pdf/2021Q4_alphabet_earnings_release.pdf?cache=d72fc76
So why beat up on ExxonMobil but not Apple, Microsoft, Google, or Facebook—corporations that make far more money than ExxonMobil while paying a tiny fraction of the taxes?
Well big tech is full of loyal Democratic voters, Democratic campaign contributors, and opposition-targeting censors.
Whether Biden leaves Big Tech alone because they’re his allies is partially speculation. What isn’t speculation is that many Democratic politicians have no clue how much these companies make and how much energy companies pay in taxes.
2) What about Big Oil’s “record profits?” We’ve been hearing that nonstop for the last several months.
For example:
“At a time of record profits, Big Oil is refusing to increase production to provide the American people some much needed relief at the gas pump.”
-Rep. Frank Pallone, (D-NJ) chairman of the House Energy and Commerce Committee
"While families are struggling to pay higher prices at the pump, oil and gas companies are recording record profits.”
-House Speaker Nancy Pelosi (D-CA)
“Giant oil corporations like @exxonmobil are making billions in record profits. We need a Windfall Profits Tax to tax big oil on their profits & we need to invest in clean energy too.”
-Sen. Elizabeth Warren (D-MA)
“The big oil companies are profiteering. They are making record profits causing consumers unprecedented pain.”
-Sen. Richard Blumenthal (D-CT)
“ExxonMobil is charging outrageous gas prices while seeing record profits.”
-Sen. Ed Markey (D-MA)
There are countless more quotes but I’ll stop there. You get the idea. It’s common knowledge Democratic politicians have all synchronized to the “record profits” narrative.
So how about it? How big are Big Oil’s “record profits?”
Looking at corporate financials for the U.S. energy industry, we’ll just focus on what are, by far, America's two largest energy companies: ExxonMobil and ChevronTexaco.
3) ExxonMobil
As previously mentioned, after posting a *real record loss* of $22.4 billion in FY2020 ExxonMobil recovered and recorded net income of $23.0 billion in FY2021.
Is that a record?
Here are some of ExxonMobil’s past annual profits, both nominal and (adjusted for inflation):
2004: $25.3 billion ($37.7 billion)
2005: $36.1 billion ($52.0 billion)
2006: $39.5 billion ($55.7 billion)
2007: $40.6 billion ($55.6 billion)
2008: $45.2 billion ($59.7 billion)
2010: $30.5 billion ($39.7 billion)
2011: $41.0 billion ($52.1 billion)
2012: $44.9 billion ($55.7 billion)
2013: $32.6 billion ($39.8 billion)
2014: $32.5 billion ($39.0 billion)
and as a reminder:
2021: $23.0 billion (aka. “record profits”)
Well, that’s a decade’s worth of years when ExxonMobil made more, a lot more, than they made in 2021, all of it very recently for those Democratic politicians with amnesia.
Meanwhile Joe Biden ordered ExxonMobil to “start paying your taxes!”
Has ExxonMobil not been paying its taxes?
Here are some samples of taxes paid by ExxonMobil in previous years (total including sales-based taxes, corporate income taxes, and other taxes and duties):
2004: $75.0 billion
2005: $98.6 billion
2006: $100.7 billion
2007: $105.7 billion
2008: $116.3 billion
2009: $78.6 billion
2010: $89.2 billion
2011: $108.1 billion
2012: $102.3 billion
2013: $91.2 billion
2014: $82.9 billion
Yes, in the eleven-year period FY2004 through FY2014, ExxonMobil paid literally over $1 trillion ($1.05T) in U.S. and international taxes, by far the largest single taxpayer in America.
During the same period, the bottom 70% of all U.S. taxpayers paid a total of $1.24 trillion in federal income taxes
Source: Internal Revenue Service
https://www.irs.gov/pub/irs-soi/19in41ts.xls
Much of those payments are excise taxes and duties to other nations since ExxonMobil extracts, refines, and moves hundreds of millions of barrels of petroleum annually from/to other countries. But the company still paid over a trillion dollars out of their revenue streams to the treasuries of the U.S. and other international governments (and diverted away from shareholders) and paid as much in taxes as the bottom 65% of all American federal income taxpayers combined: about 86 million filers.
If that means ExxonMobil hasn’t “started paying your taxes,” I don’t know what Joe Biden’s definition of “start” is. Maybe it’s the same as his definition for “start reading from your teleprompter!” or “start your cognitive decline!”
Sources: ExxonMobil 2010-2014 (pages 36, 53)
https://ir.exxonmobil.com/node/27146/html
ExxonMobil 2004-2008 (pages 30, 50)
https://ir.exxonmobil.com/node/24316/html
4) Lastly, what about ChevronTexaco?
In FY2021 ChevronTexaco posted net income of $15.6 billion. Is that a “record profit?”
By now you can see where this is going. Chevron’s net income in select previous years, nominal and (adjusted for inflation):
2006: $17.1 billion ($25.5 billion)
2007: $18.7 billion ($26.9 billion)
2008: $23.9 billion ($31.5 billion)
2010: $19.0 billion ($24.7 billion)
2011: $26.9 billion ($34.2 billion)
2012: $26.2 billion ($32.5 billion)
2013: $21.4 billion ($26.1 billion)
2014: $19.2 billion ($23.0 billion)
And again for comparison:
2021: $15.6 billion (aka. “record profits”)
Taxes paid:
2006: $35.7 billion
2007: $35.8 billion
2008: $40.3 billion
2009: $25.6 billion
2010: $31.2 billion
2011: $36.2 billion
2012: $29.7 billion
2013: $26.0 billion
2014: $23.0 billion
Chevron financials sources:
Chevron 2012-2014 (pages FS-2, 31, 48)
https://chevroncorp.gcs-web.com/node/21186/html
Chevron 2009-2011 (pages FS-2, 9, 45)
https://chevroncorp.gcs-web.com/node/18881/html
Chevron 2006-2008 (pages FS-2, 9, 47)
https://chevroncorp.gcs-web.com/node/18011/html
Incidentally, criticizing random San Francisco liberals may not be on the same level as quoting the President of the United States, but the Economics Correspondent lives in the City by the Bay and has lost count how many times he has heard or seen Bay Area liberals accuse ExxonMobil and ChevronTexaco of “paying zero tax.”
When I pointed out ExxonMobil had paid over $1 trillion in taxes from 2004 to 2014 and included URL links to their SEC-filed 10-K’s one commenter retorted “Next time include links to data that isn’t fake.”
Because... you know, the SEC is in bed with Big Oil: a joint-partnership enterprise to concoct fraudulent accounting from the offices of federal securities regulators.
But then it's always easy for progressives to live in taxes fantasyland when they’re not the ones paying.
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