During an appearance on Fox News, radio host Ben Ferguson argued against Democratic proposals to roll back tax breaks for the largest oil companies by boldly declaring that ExxonMobil -- by far the most profitable corporation in the country -- doesn't actually make that much money. See, according to Ferguson, over 90 percent of the company's profits go to the U.S. government in the form of taxes:
FERGUSON: [Obama] should also stop making these oil companies into evil companies. I mean, look at the profits the other day of Exxon. They posted $11 billion in profits. They paid $10 billion of those dollars in profits went to taxes.
FERGUSON: There's a lot of companies out there that deserve tax breaks so that they operate and employ people in the United States of America. And if we're getting $10 billion out of $11 billion in profit from Exxon, which is the facts, and they're making about 3 cents on every gallon of gas right now, I think they deserve to do business here just like every other business so we keep Americans employed. [Fox News, America Live, 5/10/11]
This is highly misleading in a couple of ways. For one, Ferguson suggests ExxonMobil's tax payments come "out of" their $11 billion in reported earnings. But they don't. The reported earnings are after-tax figures.
And Ferguson is comparing apples to oranges when he claims that "we're getting $10 billion out of $11 billion in profit from Exxon." The "$11 billion in profit" is ExxonMobil's worldwide earnings for just the first three months of 2011. As for the $10 billion that Ferguson says ExxonMobil paid to the U.S. Treasury, it appears that he's been reading an ExxonMobil press release that states:
Last year, our total taxes and duties to the U.S. government topped $9.8 billion, which includes an income tax expense of $1.6 billion. [emphasis added]
So the $10 billion is what ExxonMobil says it paid in U.S. taxes in all of 2010, not the first quarter of 2011. And there's reason to be skeptical of this figure. As the Washington Post reported, this number includes $6.2 billion in gas taxes collected from its customers:
Exxon Mobil fired back, arguing that high prices aren't its fault and were the result of higher global oil demand, political instability in oil producing regions and the weak U.S. dollar. The company also asserted that last year it paid $1.6 billion in U.S. income taxes and $8.2 billion in other taxes.
In response to questions, company officials said they were counting $6.2 billion in gasoline sales taxes and $2 billion in local property taxes and other duties.
That's right. As they move money from drivers to the government, they claim those dollars are part of their own tax burden.
ExxonMobil says that in the first quarter of this year, it paid $3.1 billion in U.S. taxes. But that figure also relies on the same fuzzy math. "To get to that number," CNNMoney reports, "the company includes the federal and state gasoline taxes that the company collects from drivers and passes on to government coffers. It also includes payroll taxes the company pays on behalf of its employees."
According to an Urban Institute document on the payroll tax, "most economists argue that workers bear the tax's full cost, with employers paying them less than they otherwise would to offset their tax payments."
From the May 10 edition of Fox News' America Live: