The Center for American Progress (CAP) just released a very important report about the finances of big oil and gas companies. Among the findings:
Five oil and gas companies—Chevron, ConocoPhillips, ExxonMobil, BP and Shell— are sitting on cash resources of $59 billion, which is 30 times more than the estimated $2 billion in annual tax breaks that these companies receive.
In other words, there is no justification for the industry's claim that they cannot afford to have their special tax giveaways taken away from them.
CAP also shoots a big hole in industry's claim that the tax breaks create jobs. It turns out these companies lay off workers even when they get the tax break. According to CAP, despite generating $546 billion in profits between 2005 and 2010, ExxonMobil, Chevron, Shell, and BP combined reduced their U.S. workforce by 11,200 employees over that time. Just in 2010 alone, the big 5 oil companies reduced their global workforce by a combined 4,400 employees, while making a combined $73 billion in profits.
And CAP reports that ExxonMobil’s effective tax rate was 18 percent while average households pay 21 percent.
The oil and gas industry does not need the special tax giveaways, especially in today's economic climate, and Congress should not hesitate to eliminate them.