While Americans count pennies, Exxon pays zero income taxes

ExxonMobil facility in Baton Rouge

ExxonMobil Facility In Baton Rouge. Image via Wikipedia

[Updated below]

“Only the little people pay taxes” -Leona Helmsley

In my last post, I wrote about the newest scam to screw hardworking people. It involves several Fortune 500 firms that have hired a company called Talx to wrestle workers’ unemployment benefits away from them.

This is how corporations “handle” the messy human contact aspects of running a business. They hire a third party to come in and do the dirty work of dealing with unsanitary stuff: emotions, workers’ livelihoods, mental breakdowns, etc.

For example, Wal-Mart hired Talx to steal the unemployment benefits of Gerald Grenier, a mentally handicapped night janitor because he allegedly stole some coins from a vending machine (Grenier says he forgot to turn in the change).

Corporations also import other jackals to “restructure” and “downsize” their beloved cogs to avoid any unnecessary unpleasantness like a workplace shooting. Everything — anything — can and should be outsourced, downsized, and restructured if it eventually results in expanding profits.

But it appears the corporation’s loyalty extends only to its own bottom line. According to the GAO, the vast majority (66%) of 1.3 million corporations, pay no federal income taxes. A quarter of the 1000 largest U.S. corporations (those with over $250 million in assets or $50 million in sales) fail to pay any taxes.

At a time when Americans are suffering the most, many corporations refuse to give back to the country.

On Monday, unemployment benefits expired for tens of thousands of unemployed Americans. Approximately 212,000 will lose their coverage this week alone. Fifteen million people are unemployed. The unemployment rate in Detroit is over 20 percent (some estimates put unemployment much higher at around 50 percent), while other estimates place the unemployment of black males in Detroit at 70 percent.

Comparatively, check out the behavior of ExxonMobil, a frequent target of vituperative screeds, but deservedly so. In 2009, Exxon paid zero dollars in US income taxes. Zilch. Nada.

They can do this via a process of sheltering their revenues in foreign tax havens (as I briefly mentioned in my last post). Forbes explains the whole dastardly process, including the wondrous Exxon update.

Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi. No wonder that of $15 billion in income taxes last year, Exxon paid none of it to Uncle Sam, and has tens of billions in earnings permanently reinvested overseas.

Here’s the really funny part: Exxon is still crying about unfair taxation on its “issues page” (h/t Mojo).

This is a corporation that has hoarded some of the most obscene profits the world has ever seen. Exxon once paid a single idiot $400 million to stop working. The company poisons the environment (while simultaneously advancing global warming denialist myths,) and engages in human rights abuses and illegal trading. At the same time, Exxon successfully bought off both political parties to maintain the level of federal regulatory incompetence to which it’s become accustomed.

When corporations squirrel away profits in foreign havens, it deprives the United States Treasury of anywhere from $10 billion to $20 billion in lost tax revenue each year, according to a Tax Notes study. If Gerald got busted for stealing vending machine coins, surely Exxon should get busted for stealing $10 billion from the US Treasury.

Americans are constantly force fed the narrative of “tightening their belts” and “sharing the sacrifice”, but this is always a one-way road designed for the poor. The really sad part is watching poor people breathlessly defend the helpless Exxon corporation against the bad ol’ Socialists who want to tax them at a fair rate, while screeching — in all seriousness — global warming isn’t real because an “Exxon scientist” says so.

These kinds of corporate pawns will be helping Exxon execs load the money bags into the vans even as the flood waters emerge on the horizon.

After all, we can all be Leona if we just wish hard enough.

—–

Update: Exxon is disputing the claims made in Forbes’s original article. A representative contacted the original author, Chris Helman, Mother Jones, myself, and I’m sure several others, with the following:

It is incorrect to say that ExxonMobil did not pay any U.S. income tax in 2009, In fact, we expect a significant U.S. federal income tax liability for 2009, although our tax return will not be filed until later this year.

Our tax installments overpaid our 2008 U.S. federal income taxes and we used that excess in part to pay our 2009 estimated taxes. The amount stated in our 10-K filing with the SEC, which Chris told me he based his story on,  includes expenses or credits recorded during 2009, and can represent items from previous years or expectations for subsequent years. It is not our actual tax bill.

The bottom line is that it is not correct to say we did not pay any U.S. federal income tax in 2009. We have already paid against our estimated 2009 U.S. federal income taxes and will be filing our return later this year.

Thanks

Alan Jeffers, Exxon Media Relations Manager

Here is Mojo with more:

Jeffers, however, declined to discuss what ExxonMobil’s actual US income tax liabilities might be—in 2009, or in any year—except to say that it wasn’t zero. “We don’t disclose our tax bill; we’re not required to,” he said. “Just like most corporations and individuals, we disclose what we’re required to.”

Which leaves the figures in ExxonMobil’s 10-K largely unexplained: Even if the firm overpaid taxes and earned a refund, it still wouldn’t show up as a zero or a positive revenue in cashflow—unless the paid tax liabilities are concealed elsewhere in the report. And it doesn’t explain why ExxonMobil’s figures are so out of wack with its peer corporations, like Wal-Mart, cited in the original story above, or Chevron, which listed $200 million in US income tax on the same line in its 10-K, Forbes reported.

In any case, the original story is wrong in this respect: According to the 10-K, a screenshot of which is provided below, ExxonMobil didn’t have a zero-tax liability in 2009; it was actually owed $46 million by the IRS, against $15.1 billion in foreign taxes owed. As Jeffers says, that may not be the case; but it’s what ExxonMobil told the SEC, its shareholders, and the world. And since the firm refuses to share its actual tax numbers with the public, it’s all we have to go by.]

16 Comments

  1. tryme123

    It is certainly unfortunate & even trecherous that people are being betrayed by the systems which have programmed them to be wage slaves. They have never realized what actual sustainability is, or even how undervalued it is, but are slowly beginning to understand that anytime there is a “top” of the ladder so to speak, in any business or employment situation~ everyone else on any of the rungs below gets crapped on to some degree.

    When the suffering becomes severe enough, people either wallow in the misery and victimization in constant complaint, OR begin to think differently: to discover other solutions, to question the lies that have been so deeply ingrained, and the reasons for such programming. In order to survive, live, thrive they must create other options which work for them. We may well be approaching a new era in survival of the fittest

    Personally, i am one of the fortunate ones, i am predominantly self employed~ like anything else my experience has indicated this is not as much what i know (or think i know), as who i know. It all boils down to relationship. The entirety of my income is a gamble & i never know what i will make or when. It is absolutely worth it to me to have this lyfestle because i am less likely to get in over my head financially, i just don’t spend $ i don’t have… i don’t do contracts for debt with cars, homes, etc… i am not the fish who took the bait & is being reeled in to be filleted. When will we realize that money cannot be eaten, it’s actual value is entirely imagined?!

    I cannot wait to see each of the many corporate giants fall~ it’s only a matter of time and i am well aware that it would have a ripple effect which would impact each walk of life. The next step to keep the wealthy in power will likely be the elimination of the cash system, indeed this is already underway; beware banking institutions. What would you do if suddenly they told you all of your money had to be stored in credits on an implanted microchip…?! What if your government took your property away simply because they could (such as: imminent domain). It’s not just a sci-fi fantasy anymore people, and the proverbial noose is tightening.

    If you want to have future resources of any type you must take individual responsibility for all of your actions, especially economically, because henceforth it may not be given to you. Food 4 thought, be well, invest your time and energy wisely, and contentment will befriend you:)

  2. ragnar

    Nice anti-corporate diatribe. But not one word about the real culprits in the federal government.

    “At a time when Americans are suffering the most, many corporations refuse to give back to the country.”

    They pay what they are legally obligated to pay. What person or corporation would pay extra?

    Be honest, when you did your taxes this year did you pay more than you were legally obligated to? Why not?

    “If Gerald got busted for stealing vending machine coins, surely Exxon should get busted for stealing $10 billion from the US Treasury.”

    The difference is that Gerald did something against the law – theft is illegal – and corporations like Exxon (and others) pay what they are legally obligated to pay. In other words, they aren’t stealing anything from the Treasury.

    Maybe you should turn your whining eye toward the actual villains of the piece. The federal government passed the tax laws you whine so much about, yet you choose to pound on the people and corporations who do nothing more than obey the law.

    Why do you ignore the government’s role in this?

    • savio

      Yeah, you’re right. I didn’t give back a penny of my 15 billion dollar earnings this year….

  3. scottchaffee

    The US has low rates for income tax compared to the rest of the industrialized world and we have the biggest deficit in the industrialized world. Hmmmmmm. Corporations are granted the same rights as individuals by corrupt SCOTUS sycophants. Win/win for corporations.

  4. alanjeffers

    It’s Alan Jeffers from ExxonMobil. As I said in my email to Allison, it’s incorrect to say that ExxonMobil did not pay any U.S. income tax in 2009, In fact, we expect a significant U.S. federal income tax liability for 2009, although our tax return will not be filed until later this year.
    Our tax installments overpaid our 2008 U.S. federal income taxes and we used that excess in part to pay our 2009 estimated taxes.
    The bottom line is that it is not correct to say we did not pay any U.S. federal income tax in 2009.

    • masodark

      I’d would be curious if you would expand on this. You say that Exxon does pay income taxes, but this article and the linked Forbes article both state this does not go to Uncle Sam. Is that accurate?

      Additionally, the Forbes article goes on to say that Exxon has over $15 billion in profits permanently invested overseas and therefore untouchable by the IRS. Is that accurate?

      Also, Forbes claims that Exxon uses creative means and off shore accounts to avoid a fairer, heavier tax burden. Is that accurate?

      I have no problem if what you say is true, but you should address and respond to the overall article and not make a misleading, blanket statement if the truth is much more complicated.

    • Allison Kilkenny

      I added Exxon’s dispute in an update, Alan.

    • savio

      Apparently, Exxon can do the one-on-one, first-name-basis thing if it’s a matter of half-answering some very serious charges. I’m impressed.

  5. tbird

    NEW SCAM??? TALX Corporation purchased The Frick Company in 2002. The Frick Company had been representing employer’s, including the employer’s mentioned, in unemployment matters for over 35 years. How is this NEW??? Do your research.

  6. jcalton

    Conservatives screech about how our corporate taxes are among the highest in the world (on paper), but our actual tax rates are in fact among the lowest.
    http://mediamatters.org/research/201002020005
    So even if they were to actually pay like the smaller businesses have to (those that can’t afford to build fake offices in the Caribbean), they still wouldn’t be paying an undue burden.

    Also, if corporations want to be treated as people, then they should be audited and prosecuted just like people with foreign tax shelters would be.

    • jham710

      “Also, if corporations want to be treated as people, then they should be audited and prosecuted just like people with foreign tax shelters would be.”

      I couldn’t agree with you more.

      http://www.thehamandlegsshow.com

  7. nooneyouknow

    Exxon is a cancer on the US and the world–an environmental, political, financial, economic, social, legal, ethical cancer. Government enables Exxon. Only we, the people, can stop its abuses.

  8. savio

    Allison,

    Amen to your splendid piece. As Masodark points out, commenter alanjeffers hasn’t answered your piece at all. I imagine the window for evasiveness would be considerably smaller were his handle, say, “Gerald.”

  9. Pingback: Während die Amerikaner Groschen zählen, zahlt Exxon Null Ertragsteuern

    [...] [Updated unten] "Nur die kleinen Leute zahlen Steuern"-Leona Helmsley in meinem letzten Beitrag schrieb ich über die neueste Masche, um Leute schrauben fleißig. Es beinhaltet mehrere Fortune 500 Unternehmen, die TALX genannt haben eine Firma angeheuert, um sie ringen Arbeitnehmer Arbeitslosengeld weg von. Dies ist, wie Unternehmen "handle" die chaotische menschliche Kontakt Aspekte der laufenden [. . . ] URL des Original-Artikel http://trueslant.com/allisonkilkenny/2010/04/06/while-americans-count-pennies-exxon-pays-zero-income… [...]

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