U.S. Oil Companies Paid, Collected More in Taxes Than They Made in Profits in 2006

According to the EIA, the major energy producing companies (listed here) like BP, Exxon (XOM), Shell (RDS.A), Chevron (CVX), etc. earned $131.5 billion in profits in 2006 (most recent year available, data here), see chart above.

Those same companies paid or collected: a) $90.445 billion in income taxes in 2006 to various governments in Europe and the Middle East, the U.S., Canada, Russia, etc., b) $8.25 billion in non-income taxes to the U.S. government (production taxes, sales taxes, property taxes, payroll taxes, etc. (data here), and c) $48 billion in U.S. excise taxes (data here), for a total of $146.8 billion.

Bottom Line: American oil companies paid and collected more taxes ($146.8 billion) in 2006 than they made in profits ($131.5 billion).

Comments

[grishick:]

What's so surprising? If payroll is a major expense, than the amount of income taxes that the employer collects and pays together with payroll taxes may easily be more than their profit. If a company is just a retailer with a small margin, they would collect more sales taxes and VAT than their profit also, especially in Europe.

2008 Nov 02 04:34 AM

[jpmang:]

While this may not be surprising to some I would suggest that the same criteria be applied to large corporations in the U.S. that have outsourced most or all of their manufacturing.The problem being faced by most of the states(and feds)is that all those jobs at $17-20/hr. when replaced are only paying about $12/hr.Do the math and you will see the tax base that has been lost.Not only the taxes---but the decrease in disposable income hurts consumer spending.It is fitting though that the politicians who allowed this to happen are now crying poverty!!!

2008 Nov 02 06:33 AM

[CLH:]

jpmang---Maybe those workers arent worth $17 and hour and thats why the jobs went overseas. Remember if the company has to pay more then the worker puts out, the company can either go overseas or out of business. Its too bad schools no longer teach capitalism.

Taxes are a drain on everyone (except gov workers). In the long run taxes on the corporations are always paid by those who buy the product.

2008 Nov 02 11:51 AM

[tuckerin:]

"Higher taxes reduce the incentive to work, produce, invest, and save, thereby dampening overall economic activity and job creation" attributed to Burt Hauser, an economist, featured by David Ranson in an eye opening article in the WSJ-May 20, 2008 Mr Obama's intent to windfall tax the oil industry will backfire on the US taspayer and it is still inevitable!

2008 Nov 02 01:10 PM

[hotforoil:]

Don't fret it! The "free lunch" nuts will find this out very quickly, as their jobs continue to disappear. Couldn't happen to nicer bunch.

Cheers!

2008 Nov 02 03:05 PM

[Timothy Stolz:]

Thank you for the documentation links to the EIA statistics. I ran a couple of copies for the "neighborhood loudmouth" who is always bashing the oil companies. I am opposed to the windfall profits tax as I believe it will damage our oil companies ability to compete in the world markets. This nut case goes out of his way to "preach" that the villian of high gas prices are the sinister oil companies, and that they should either pay more tax or be nationalized.
I doubt this will shut him up....but it will make me feel better!

2008 Nov 02 09:08 PM

[User 290436:]

If you know anything at all about Accounting, which this author apparently does not, then you would know that "INCOME TAXES" are the payroll taxes that the governments require to be withheld, but are actually paid by the EMPLOYEE (for the most part). The portion they consider to be a "payroll tax" was for the Employer portion of Social Security. No company in the history of the United States has EVER paid more in taxes for their NET income than the profit they made for that year.

It is sad that this author has attempted to twist things so that it looks favorable to the oil companies. Of the $90.445 million COLLECTED and PAID for income taxes, a large portion would be Federal/State/Local INCOME Taxes, which the EMPLOYEES pay from their gross pay!

2008 Nov 02 11:01 PM

[Timothy Stolz:]

User 290436....how were you able to determine that the $90.445 million from the EIA data Table B5 was likely employee paid? It would be important to know without a doubt that what you say is fact.
I understand WHAT it is you are saying, I am just not certain as to the "definition" of the $90.445 number of what was reported in Table B5.
Can you or Mark Perry elaborate?

2008 Nov 02 11:39 PM

[redlac:]

I'm pretty sure the sales tax that they're talking about is not what they collect from customers and pass on to the government, but sales tax that they pay on equipment, etc. that they purchase. Businesses keep track of the sales tax that they charge and pass on, but they do not consider it an expense I don't think or something that they pay.


On Nov 02 04:34 AM grishick wrote:

> What's so surprising? If payroll is a major expense, than the amount
> of income taxes that the employer collects and pays together with
> payroll taxes may easily be more than their profit. If a company
> is just a retailer with a small margin, they would collect more sales
> taxes and VAT than their profit also, especially in Europe.

2008 Nov 03 04:08 PM