Oil Companies Paid More Than Bottom 75% of Taxpayers

Investor's Business Daily: According to the American Petroleum Institute, in 2006 alone, U.S. oil companies paid some $138 billion in taxes to the Internal Revenue Service [IRS], and that doesn't include special oil severance, sales and use taxes companies also had to pay.

Internal Revenue Service (pdf file) (Table 6, p. 41): In 2005 (the most recent year for which data are available), the bottom 75% of all individual taxpayers (about 100 million taxpayers out of 132 million total) paid about $130.9 billion in income taxes. Adjusting by the recent average of about $5 billion in annual increases in tax revenue from individuals, it is estimated that the bottom 75% of individual taxpayers (more than 100 million individuals) paid about $136 billion in 2006.

Bottom Line: In 2006, U.S. oil companies paid more in corporate income taxes to the IRS ($138 billion) than the individual taxes paid by the more than 100 million individual taxpayers in the bottom 75% of all individual taxpayers (estimated to be $136 billion, see chart above).

Comments

[bsharvy]

Who cares? Why was this even published? It has nothing to do with stocks, and barely offers any political interest. If the goal is political insight, why would you produce the American Petroleum Institute as source? It's the major lobby group ("trade association") for the oil industry.

[bsharvy]

Who cares? Why was this even published? It has nothing to do with stocks, and barely offers any political interest. If the goal is political insight, why would you produce the American Petroleum Institute as source? It's the major lobby group ("trade association") for the oil industry.

[CrossProfit]

bsharvy,

Some investors think that it is important to gauge if there will be additional taxes on the industry. You can argue about the source and perhaps whether this info is going to influence congress or not, but articles are not necessarily stock specific. Sometimes industry related news is important as well. At the very least, you are informed of the industry's propaganda and what they think is an important message.

The author has not stated his opinion about the 'news', that is interesting on its own! The author is for more drilling in the U.S. to reduce dependency on imported oil and would like to see lower prices at the pump.

You have to follow specific authors in order to follow the true meaning behind the articles.
See:
seekingalpha.com/artic...

CrossProfit

[Jack K]

I thought this was very interesting. So many socialists/democrats want to raise oil companies taxes. Revenge on the BIG BAD oil co. to get them reelected. You can kill the goose that lays the golden egg.

[jdspain]

it states corp tax,, but i wonder if they include in this tax,, all the tax they collect at the gas pump we pay for federal , state or local taxes as taxes paid under corp income. no breakout of taxes paid.

this is not a tax on oil industry and they i assume get a service fee for collecting these taxes and passing them on.. in other words they make money collecting taxes.

[VennData]

Complete spin. Two-thirds of Americans pay more in Social security taxes than income taxes. So the GOPers who continually talk about "income taxes" are totally misleading.

www.urban.org/publicat...

[ship shapeand bristolfashion]

bottom line, they pay a lot and guarantee our mobility. Dems talk a lot and do nothing for our country, except making it weaker, every time they are in power.

[Acetracy2]

What's the point? My effective tax rate, including everything (Fed, State, Local sales, RE, Soc. Sec, etc.) is nearly 50%. Exxon/Mobil is under 20%!! Your local small business dry cleaner is taxed at 33%. If this country taxed Exxon like the rest of us, perhaps we wouldn't be so addicted to oil and have a balanced budget.

Let's put a flat tax on corporate America. No depletion allowance; no special credits. All corporations pay a flat tax on IBIT. Not only is it sound economics (no tinketing with the economy), it would save corp. America billions. In 2006 GE's Fed Tax return was 30,000 pages!!!

[seeksome]

138 BILLION that is a B for billion and for socialist democrats it is not enough get your head out of your a@@.Spin yeah right how do you spin 138 BILLION you moron.To get what you want at the price you want to pay go to:seeksomething.com

[skwestorange]

Absent a breakdown of what taxes are included in this total, this information is meaningless and only good for misleading propaganda. I am sure that this is not corporate income taxes paid to the IRS and States. This is just false and misleading information.

[seeksome]

Liberals just can't handle the truth look at the bottom line above in article 138 BILLION paid in corprate taxes to IRS.Plus the state,federal and local goverments made even more with the taxes at the pump.You just can't handle the TRUTH 138 BILLION!
seeksomething.com

[surgcare]

For those of you who are angry about the truth ,I guess you won't be happy until the oil companies are wiped out and no longer exist or are then own by china ,OPEC etc . . Thats why I am long oil and have been doing quite well . The proverbial " cut off your nose to spite your face " .

[RealityJunkie]

AceTracy,

Yeah a flat tax would be nice. The trouble is that absolutely no politician in their right mind would put in place a system that can't be manipulated. Their very existence is tied to being able to control things. Plus I'm sure all the tax lawyers and accountants wouldn't exactly be pleased to have a system that no longer needs their services. Then you have the "social engineers" who want to transform behavior through tax incentives and penalties.

A flat tax? Nice, but it's a pipe dream.

[surgcare]

PS A question for all those people who think the oil companies are responsible for rising gas prices : If the oil companies took no profit for a year how far down would gas prices come or up ? If you can't answer this question with an emphatic " dramatic reduction " , SHUT UP.

[cz]

Barry,
What were the gross earnings and specific deductions for both classes of tax payers mentioned in your article??

[cz]

...sorry, I mean Mark.

[bill d]

I heard something I just find so hard to believe.
That when things are taxed the price increase is actually passed on to the next buyer.
Can this possibly be true ?
So taxing fuel and the oil companies, etc., will make me pay MORE ???
And this benefits me HOW ???
TFPIC

[burque]

This is not informative without the denominator. Can you also compare net income of oil companies vs. net income of bottom 75% individual taxpayers?

[BS Detector]

So "big oil" paid more in federal income tax than the bottom 75% of individuals. Would it surprise you to learn that "big oil" also had more earnings than the bottom 75% of taxpayers?

That is one big huge stinking lie of omission.

[bill d]

AND we don't have that nice depletion allowance either.

[ArtfulDodger]

Only envious, sick Dumborats care how much businesses make. Many of us care because we're investors, but not them.

And the fact is, they hate anyone who makes more money than they do. And not a whole lot of people do. Skinflinton and Bullery have over a hundred million since entering the White House in `92 with a net worth of $130,000.

Albert GaWhore has made over a hundred million investing in "alternative energies" that he knew his cronies in Congress would make legislation to favor.

If it were up to the socialists like Maxine Waters and Lil' O'Sambo and Develry they'd take every penny everyone of us makes and distribute it as they wish.

Why? Not only are they sick envious people, but they're also smarter than everyone else and know better what to do with our money than we do.

Lil' O'Sambo wants us to stop eating so much and stop driving SUVs and stop putting our thermostats up on 72 in the winter and down on 68 in the summer.

"These things Americans are going to have to stop," he says. But he should have added, If I get elected president.

Sick! Very sick!

Rebeldog

[Eagle-Chief]

Mark - it is hard to read anything intelligent into your news article here. It appears that your are as dumb as a rock to insinuate that oil companies pay more taxes to the U.S. government than do the bottom 75% of all U.S. taxpayers. What is your PhD in, you fool? My father taught me long ago that companies do not pay taxes - it is a complete myth to think they do! Let's say that the govenment "taxes" Exxon Mobil or Chevron 100 million dollars a year. Sure, the company pays the taxes, but where do they get the money from, Mark? They surely don't pull it out of their savings accounts. They raise the prices of the goods or services that they are selling - in other words, they pass the costs on to the consumers. So everytime WE, the "bottom 75% of life forms on the planet" go to fill up our gas tanks, WE ARE PAYING THE TAXES ! Governments try to make it sound good for corporations to pay taxes (in lieu of the consumer) but there is no such thing. The consumer pays the costs ultimately. I'm amazed to see that your "bio" says that you are an economics professor. WOW. Get a clue, Mark!

[gaucho]

Pathetic state of affairs for the botton 75%.
I like the statement that the top 1% pay over 50% of the taxes in this country. Yet the other side is the top 1% control over 60% of the countries wealth and earn over 50% of its income and that is after deductions. That side is never mentioned. Well let them eat cake.
The wealthy have the following attitude. The bastards don't deserve heath care. Let their children suffer! We have all the money so why should we share. More tax breaks for the rich. And while we are at it why should we pay any social security up to 90K of income at all. We do not use it. let them pay the additional 7% of their salary plus 7% from their employer. We are superior human beings and that is why they should send their children off to die in IRAQ and not ours.

[buyitcheap]

Eagle - that's probably about right since 75% is somewhere around $60K in income, between exemptions, and credits, the net tax liability (ex-SS/Med) is Zero.

BUT you're right, ultimately we are paying the taxes in the form of higher prices, which is why we shouldn't tax corporations at all, as Robert Reich states in his new book, and tax the "owners" or the shareholders at the individual level. One might also consider from a policy standpoint, a requirement that corps pay out a minimum of their net income, similar to MLPs or REITs. Good comments on this board.

[seeksome]

It is not Mark that needs to get a clue is he the one taxing these corporations? DUH! If there is a problem in any market the underlying cause is always goverment involvement.wwwseeksom...

[Brian27]

It is true that corporations do not pay taxes, individuals pay taxes. So the corporate tax rate should be zero.

However, it is clear that corporations collect taxes for the IRS. And they collect more from oil users, for the IRS, than the IRS collects directly from income taxes on the bottom 75%.