That gargantuan bottom line was no doubt padded just a smidge by the fact that Exxon gets $600 million in annual federal tax breaks. Every effort to eliminate these breaks—recently pushed by Sens. Bernie Sanders of Vermont and Robert Menendez of New Jersey—can't get through Congress. Surprise, surprise. Exxon pays an effective corporate income tax rate of about 13 percent, just over a third of the nominal rate of 35 percent.
One tax break is particularly egregious. Exxon (and other oil companies) don't have to pay eight cents a barrel into the federal Oil Spill Liability Trust Fund for tar sands oil. That's because tar sands oil gets an exemption from the tax because it's not "conventional oil."
Very convenient when your company spills a half-a-million gallons of ... uh ... unconventional oil somewhere as Exxon's Pegasus pipeline did on Easter Sunday in the little town of Mayflower, Arkansas. An incredible mess. For PR purposes, Exxon called this "oil." For tax purposes, however, it's "dilbit," diluted bitumen shipped from the tar sands of Alberta. The tar sands deposits are definitely unconventional "oil" that is dirtier, harder to extract, harder to refine, harder and more expensive to clean up, and viewed by many of its fans as North America's pathway to the elusive objective of energy independence.
Exxon says it is paying to clean up the Mayflower spill, a process that is ongoing, and that it will cover every "valid claim" presented by affected residents. But the company is under no obligation to do so. That tax loophole is one that ought to be remedied sooner rather than later as dilbit, with or without the building of Keystone XL pipeline, is going to flow in ever-greater quantities into the United States over the next decade or more unless legislation forbids it. And despite the propaganda, where there's oil flow, there are oil spills.
Rebecca Leber takes note of where Exxon puts some of its lightly taxed take-home dollars:
• $12.97 million spent on lobbying in 2012 "to protect low tax rates and block pollution controls and safeguards for public health." Through March 31 this year, Exxon has spent $4.84 million lobbying.
• $3.6 million invested in contributions to PACs, candidates, and outside groups for the 2012 election cycle. Eighty-nine percent of that dough went to Republicans.
• $5.6 billion spent on buying back its own stock, something that makes the largest shareholders and best-paid company executives even richer.
• This year, Exxon CEO Rex Tillerson, who has said climate change isn't so bad and only requires an engineering solution, received a 15 percent raise in his salary to $40.3 million, 769 times the median U.S. household income.