Ed has already begun the process of digging into the President’s new tax plan, but as time goes by even more interesting tidbits emerge. One of the more unintentionally amusing ones comes to us from Tim Geithner himself, writing at the Wall Street Journal. In this detailed, fact-driven piece, Geithner points out how terribly unfair it is for U.S. energy companies to get away with paying such low taxes while raking in massive profits and living large on government subsidies.
“The effective tax rate on the energy industry in the United States today is much, much lower than the average. It’s lower because the tax code provides a substantial amount of subsidies to those private companies. We propose, for lots of reasons, mostly because we think it’s fair and more efficient, to dial some of those back.”
My, my… that does sound like a problem. Somebody should look into this at once. I mean, I don’t want to see the energy companies getting over-taxed, but they need to kick in a little something if they’re turning a profit. There’s just one problem with this complaint, though. Forbes has been tracking which companies are paying how much in taxes for some time now. Guess who actually pays the most?
America’s three biggest oil companies, ExxonMobil, Chevron and ConocoPhillips , all endure income tax burdens of more than 40%–higher than the statutory U.S. rate of 35%. Exxon, with a 45% rate, tallied $21.6 billion in worldwide income taxes for 2010.
What did some companies in other industries pay?
- Wal-Mart – $7.1 billion (at a rate of 32.4%) in income taxes
- Hewlett-Packard – a 21% rate
- Google – a 20% tax rate for 2010
- General Electric – $1.05 billion taxes on income of $14.2 billion, a tax rate of 7.4%.
Now tell me again how the energy companies are the ones getting off cheaply and requiring the attention of the tax man? We shouldn’t be too hard on Mr. Geithner, though. Math is hard.