What's Missing From This Story (Corporate Edition)?
Take a look at this article, from AP "Business Writer" John Porretto.
"Exxon-Mobil Posts Record Profit."
As you read, you'll discover that the world's largest oil company earned the largest profit in U.S. corporate history last year--$39.5 billion.
I can already predict the collective reaction from the MSM and the public. Why, those greedy oil companies. They're gouging us, with Exxon-Mobil in the lead. Mr. Porretto helpfully reminds us that Exxon-Mobil also set the old records for earnings and profits, implying that the "Biggest of Big Oil" has been screwing us for some time.
But here's a question for you--and Mr. Porretto:
How much does Exxon-Mobil (and the other oil companies) pay in corporate income taxes during a year?
Quite a bit, it turns out. According to the Tax Foundation, Exxon-Mobil's corporate tax bill in 2005 (the most recent year for which data is available) was $23.1 billion, on a before-tax income of $59.1 billion. Exxon-Mobil's effective corporate tax rate in 2005 was 39.1%. Collectively, the nation's three largest oil companies (Exxon-Mobil, Chevron and ConocoPhillips) paid $44.3 billion in corporate income tax that year, with an average tax rate of 41%.
But you'll never read that in an AP business story. Just lots of big numbers that create the impression of gargantuan profits, and the need for a windfall profits tax.
I'd say $44.3 billion is a pretty sizeable windfall. But then again, I'm not a member of Congress---or a writer for the AP.