How much does the oil industry pay in income taxes each year?
U.S. oil and natural gas companies pay their fair share of taxes and are a tremendous source of public revenue. In 2011, income tax expenses averaged 40.6 percent, compared to just 25.1 percent for other S&P Industrial companies.
The U.S. oil and natural gas industry also pays the federal government significant rents, royalties and lease payments for production access — totaling more than $100 billion since 2000. In fact, U.S. oil and natural gas companies pay approximately $86 million to the federal government in both income taxes and production fees every single day.
ExxonMobil’s recent tax bill offers a more tangible example. The company’s U.S. tax bill for the first half of 2011 was $6.7 billion, a figure greater than their $5.5 billion in operating earnings in the United States. This means that governments in the U.S. earned almost $1.22 for every dollar that ExxonMobil shareholders earned. Meanwhile, ExxonMobil has continued to invest in projects in the United States — from 2009 to the first half of last year, they invested $19.8 billion in U.S. capital projects, an amount equal to 120 percent of their U.S. operating earnings over the same period.
A poll taken of voters on election night, November 2010, showed that Americans oppose raising taxes on America’s oil and natural gas industry by a 2-to-1 margin, 60 percent to 30 percent. Most (54 percent) believe such an increase could destroy jobs. They’re right. Punitive tax increases on the oil and natural gas industry would have a chilling effect on business growth and investment, and also hurt the millions of Americans whose retirement funds are invested in oil and natural gas stock. While it may seem backwards, raising taxes on the U.S. oil natural gas industry would actually cause government revenue to decrease.