Exxon Mobil Corporation (XOM), Chevron Corporation (CVX), ConocoPhillips (COP)…Big Oil’s Back in Washington’s Taxation Crosshairs

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Massive payments already
Absolutely not. Harking back to 2011, of the top 25 corporate-tax payers, we see that ExxonMobil easily had first place locked up. Its $27.3 billion in income tax payments made for an effective tax rate of approximately 42%. Chevron Corporation (NYSE:CVX) was next with $17.4 billion in income taxes paid, for a 43.3% effective rate. And ConocoPhillips (NYSE:COP) was in third place, its 45.6% effective rate making for tax payments of $10.6 billion. But that wasn’t all. In addition to its income taxes, Exxon Mobil Corporation (NYSE:XOM), for instance, recorded another $70 million-plus in sales taxes and other taxes and duties.

For comparison’s sake
Compare those tax payments and percentages with those of Apple Inc. (NASDAQ:AAPL), which, from a market capitalization perspective, is larger than ExxonMobil. The California technology superstar paid income taxes of about $4 billion in 2011, an effective rate of just 24.6%. And McDonald’s Corporation (NYSE:MCD), which checked in at 25th place on the list of “elite” taxpayers, forked over $2.1 billion in taxes. Its effective rate: 31.3%.

But maybe profitability — net income as a percentage of revenues — is a better way to determine which corporations should be accorded punitive treatment at tax time. Maybe Exxon Mobil Corporation (NYSE:XOM) et al. are simply too profitable. Wrong again. Neither Exxon Mobil Corporation (NYSE:XOM) nor Chevron Corporation (NYSE:CVX) topped 10% in net profit margins for 2011. Conversely, the margins for technology leaders Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) were 26% and 32%, respectively.

A Foolish takeaway
So the disdain for Big Oil continues uninterrupted. One might think that, given the companies’ success in helping to vastly expand U.S. oil and gas reserves in recent years, along with their need to push into inhospitable places such as the Russian Arctic in search of progressively more elusive reserves, they might begin to escape Washington’s political crosshairs.

The article Big Oil’s Back in Washington’s Taxation Crosshairs originally appeared on Fool.com and is written by David Smith.

Fool contributor David Smith owns shares of Chesapeake Energy. The Motley Fool recommends Apple, Chevron, and McDonald’s; owns shares of Apple and McDonald’s; and has options on Chesapeake Energy.

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