The first oil company subsidies were adopted a century ago. Today, oil companies are among the most profitable corporations in America, with ExxonMobil alone reporting global profits of $44.9 billion in 2012. Despite these extravagant profits, the U.S. continues to give more than $4 billion a year in tax subsidies to energy producers.
Subsidies are one of the reasons ExxonMobil has paid less than half the official U.S. corporate income tax rate of 35%. Between 2010 and 2012, ExxonMobil reported more than $30 billion of U.S. pre-tax income and paid $4.6 billion in corporate income taxes, according to its Securities and Exchange Commission filings. That’s a tax rate of just 15% compared to the official corporate tax rate of 35%. This tax subsidy cut ExxonMobil’s taxes by $6.2 billion over three years. In 2009, ExxonMobil got an even better deal when the company reported $2.5 billion in U.S profits and got a federal tax rebate of $954 million, according to Citizens for Tax Justice.
ExxonMobil had also accumulated $43 billion in offshore profits by the end of 2012, on which it paid no U.S. taxes. Nearly one-third (29 of 92) of ExxonMobil’s foreign subsidiaries are registered in tax-haven nations that impose little to no tax on corporate profits.
ExxonMobil also aggressively seeks state tax subsidies. In Louisiana, where the company operates refineries and chemical plants, it received $136 million in property tax abatements in 2011, according to Subsidy Tracker, a project of Good Jobs First. The state of Louisiana also issued more than $500 million in tax-exempt bonds on behalf of ExxonMobil...
