ExxonMobil getting off for Free

For many years I struggled with where I fit in politically. My parents, like many Cubans, were Republicans. When I registered to vote, I followed their lead and registered as a Republican. I was 18 years old and while proud to be a registered voter, I had no idea what a Republican was. Many years later, right after I left the Army, I started paying attention to politics. In 1992 my wife and I watched the Republican National Convention and realized we were not Republicans. We changed party affiliation and became Democrats.

Although I never felt like a true Democrat, cringing at some of their proposals and public statements, I have become more certain that I am not a Republican. Recently I supported Ron Paul for President and felt the Libertarian cause was one I could support. During the first year of the Obama Presidency, with all the obstructionist politics from the Republicans, the rather disingenuous protests of the Tea Party Movement and a general sense of hopeless division and partisanship in our politics, I felt more isolated from any party than ever.

As if often the case for me, if I just let things happen, without trying to force them, they become clear. I’m an American. I support what I believe is in America’s best interests and holds true to our Constitution. I will support any candidate for office who represents those ideals and will legislate and vote accordingly.

During the recent April 15th Tax Day there was the typical gnashing of teeth and growling about being overtaxed. I’m not going to get into all that here and now, although I will say that I had a lower tax burden this year than last. Based on everything I’ve read, Americans are paying the lowest federal tax burden in decades. No, this post is about the world’s largest publicly traded oil company; the American oil and gas behemoth, ExxonMobil.

ExxonMobil is a Texas based corporation with operations around the globe. The company is engaged in the exploration, production, transportation and sale of crude oil and natural gas and the manufacture, transportation and sale of petroleum products. ExxonMobil made the record books in 2007 recording the largest quarterly and annual profits of any company in the history of the United States. To give us a little perspective, rather than focus on the enormous annual profit of $40 Billion, I’d like to focus on something smaller. The company earned $1,300 per second in 2007.

I remember being proud of ExxonMobil when I first heard this. An American success story on an epic scale. Employer of tens of thousands, boldly seeking out the crude oil the Earth provides and refining it to provide the fuel that drives our economy, making their shareholders wealthy in the process. Bravo ExxonMobil, Masters of the Universe! Then I read this¹:

In its 2009 annual report to the SEC, ExxonMobil recorded a larger income tax expense than any other U.S. company last year, some $17.6 billion, or 47% of pretax earnings. 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.

I realize there are ways to limit your tax exposure, we all do it as individuals as well. But there’s something decidedly un-American about creating subsidiaries in other countries to avoid paying taxes to the place you call home. Now ExxonMobil has responded to the above article in Forbes magazine by indicating that while their annual report shows no tax liability to the US, that isn’t their tax bill, just the report they send to the SEC and their shareholders. They expect to have a “significant US Federal income tax liability for 2009” but they won’t tell anyone what it is. “We don’t disclose our tax bill; we’re not required to.”

If you’re not familiar with reading 10-K’s, they can be confusing. But ExxonMobil’s 2009 10-K shows a tax refund from the US of $46 Million and a non-US tax expense of $15 Billion.

 

I am an American. I support what I believe is in America’s best interests. I cannot, and will not, support ExxonMobil in this disgraceful slap in the face to our country. I have options, as we all do, and I will exercise my option by spending my hard earned cash somewhere other than ExxonMobil. President Obama has proposed to close the off shore tax avoidance loopholes US Corporations like ExxonMobil use to avoid paying taxes, but I don’t know where that proposal stands today. I plan to find out.

(1) Forbes

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One comment

  1. Hi Joe,
    Been there done that! I lived in NC when I was first able to vote, and registered Republican just like my parents, though I had no clue what that meant. I remember about the age of 21 or so I somehow learned to think for myself and knew I wasn’t a Republican. Ended up with no party affiliation for many years, only when I moved to FL and wanted to vote in primary did I register Democrat. Anyway, I’m voting for the best candidate I can find regardless of party. And I’m still not going to Exxon. Keep on blogging!

    Patty

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