In commenting on the talks about deficit reduction and raising the federal debt limit, President Barack Obama said he wanted to eliminate tax deductions for oil and gas companies “that are making hundreds of billions of dollars.” However, he did not mention that the top three U.S. oil companies alone paid $42.8 billion in income taxes in 2010, according to the Securities and Exchange Commission (SEC).
At his June 29 press conference at the White House, Obama said, “There’s been a lot of discussion about revenues and raising taxes in recent weeks, so I want to be clear about what we’re proposing here. I spent the last two years cutting taxes for ordinary Americans, and I want to extend those middle-class tax cuts. The tax cuts I’m proposing we get rid of are tax breaks for millionaires and billionaires, tax breaks for oil companies and hedge fund managers and corporate jet owners.”
“*f if we choose to keep tax breaks for oil and gas companies that are making hundreds of billions of dollars, then that means we’ve got to cut some kids off from getting a college scholarship,” said Obama. “I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up a tax break that no other business enjoys.”
The top three oil companies in the United States are ExxonMobil, ConocoPhillips and Chevron. According to the SEC filings of those companies, as analyzed by Forbes, ExxonMobil’s pretax income in 2010 was $52 billion, from which it paid $21.6 billion in income taxes worldwide, leaving a net income of $30.5 billion. That equals a tax rate of 45 percent, which is 10 percent above the statutory corporate rate of 35 percent.