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Fossil Fools don’t pay taxes

December 21st, 2017 · No Comments

The Republican Party just passed and is celebrating the GOP Tax Scam, with the obsequious genuflecting to Trump added even more insult to the injury that they have done to the nation. Amid the Tax Scam, the Republican Senators and Representatives tried to stuff in measures every which way to Sunday to gouge wage-earning Americans to put money into special interests and billionaire contributors. Within this were numerous deals providing special deals to fossil fuel interests.

When it comes to benefiting from tax cuts, those dirty industries needed special deals because they pretty much don’t pay any taxes relative to their incomes as is seen strikingly in this table from 538.

  • Coal firms essentially don’t pay Federal taxes.
  • Oil firms are under ten percent effective tax rate.

Pretty hard to take seriously fossil fools whining about oppressive taxation when, essentially, they aren’t paying taxes.

This is made explicit after the fold. Even looking solely at money-making companies, fossil fools don’t look so foolish when it comes to avoiding taxes.  With years of sneaking in this benefit and that exclusion, coal and oil firms pay a fraction of the taxes of other industries.

  • Aerospace/defense: 23%
  • Auto parts: 27%
  • Construction supplies: 30%
  • Food wholesalers: 34%
  • Machinery: 27%
  • etc …

The average, across all industries, is an effective tax rate of 26.22% for money-making companies.

What about fossil fuels?

  • Coal: 0.69%
  • Oil/Gas:
    • integrated: 8.01%
    • production/exploration: 7.08%
    • Distribution: 7.78%

No wonder they aren’t focused on tax cuts and are pleading for even more subsidies, special deals, and enabling more polluting. After all, how can you cut taxes when they barely pay them?

To show the absurdity, let’s stay sort of in the same extraction world,

  • Metals & mining: 33.52%

How about other traditional energy:

  • utilities: 30.09%

How about dirty energy’s clean competition?

  • Green & renewable energy: 26.42%

While clean energy firms, pretty much, are paying ‘what business pays’ in taxes, the dirty energy firms polluting the air our children breathe, the water they drink, and the future they will live in are barely paying any taxes at all. When you hear of fossil foolish subsidies, this fossil-foolishly low effective tax rate is a cogent example of their reality.

Now, even with their absurdly low tax rates, the OIl Giants win giantly (YUGELY) from the GOP tax scheme, perhaps even boosting earnings per share by five percent. There are gains from expensing (allowing, for five years, 100 percent deducted in year one rather than deduction schedules), reduced US implications of overseas earnings, etc, etc, etc … For decades, the legions of lawyers, accountants, and lobbyists have worked hard to assure that the oil, natural gas, and coal industries pay as low an effective tax rate as possible. With their claws in the Republican Party, they successfully snuck plenty of fossil-foolish provisions that will even further lower their contribution to the general treasury.

Tax Rates by Industry

Data as of January 2017
Industry name Number of firms Average across all companies Average across only money-making companies Aggregate effective tax rate
Advertising 41 5.10% 30.93% 32.68%
Aerospace/Defense 96 10.86% 23.22% 25.09%
Air Transport 18 22.99% 28.52% 21.14%
Apparel 58 10.95% 22.42% 21.80%
Auto & Truck 15 8.14% 12.66% 9.10%
Auto Parts 63 10.40% 27.22% 25.41%
Bank (Money Center) 10 27.90% 30.23% 30.23%
Banks (Regional) 645 25.43% 29.94% 29.20%
Beverage (Alcoholic) 25 10.86% 26.91% 27.04%
Beverage (Soft) 36 5.87% 23.50% 23.52%
Broadcasting 30 18.54% 29.32% 37.82%
Brokerage & Investment Banking 45 13.59% 30.63% 30.71%
Building Materials 41 23.39% 30.05% 12.53%
Business & Consumer Services 165 12.61% 35.45% 38.64%
Cable TV 14 20.28% 37.20% 20.65%
Chemical (Basic) 45 7.71% 23.77% 29.20%
Chemical (Diversified) 8 6.59% 11.56% 11.33%
Chemical (Specialty) 100 9.58% 27.57% 30.42%
Coal & Related Energy 38 0.48% 0.69% NA
Computer Services 117 11.18% 15.63% 15.99%
Computers/Peripherals 55 5.68% 25.59% 26.44%
Construction Supplies 51 18.44% 30.41% 26.46%
Diversified 24 11.55% 22.37% 22.97%
Drugs (Biotechnology) 426 1.44% 19.99% 31.79%
Drugs (Pharmaceutical) 164 2.54% 18.18% 19.41%
Education 36 9.29% 33.79% 40.72%
Electrical Equipment 119 5.87% 28.74% 34.02%
Electronics (Consumer & Office) 24 3.81% 30.25% NA
Electronics (General) 164 8.85% 22.36% 9.71%
Engineering/Construction 48 15.15% 33.90% 49.85%
Entertainment 79 5.50% 30.64% 30.34%
Environmental & Waste Services 89 5.07% 35.55% 36.03%
Farming/Agriculture 37 7.89% 23.82% 24.68%
Financial Svcs. (Non-bank & Insurance) 258 20.80% 31.81% 31.90%
Food Processing 87 14.66% 30.10% 29.48%
Food Wholesalers 16 11.77% 34.17% 29.77%
Furn/Home Furnishings 30 14.58% 23.72% 23.81%
Green & Renewable Energy 25 4.25% 26.42% NA
Healthcare Products 254 6.12% 16.51% 16.35%
Healthcare Support Services 121 14.31% 38.15% 38.27%
Heathcare Information and Technology 125 6.32% 17.53% 19.08%
Homebuilding 33 27.28% 34.37% 34.39%
Hospitals/Healthcare Facilities 38 12.06% 31.40% 54.47%
Hotel/Gaming 69 11.23% 12.10% 15.99%
Household Products 129 9.05% 26.65% 27.06%
Information Services 64 16.37% 27.15% 28.51%
Insurance (General) 19 18.33% 24.92% 23.20%
Insurance (Life) 22 22.91% 25.47% 25.48%
Insurance (Prop/Cas.) 50 22.27% 27.32% 27.39%
Investments & Asset Management 156 7.71% 23.02% 24.41%
Machinery 127 11.73% 27.05% 28.76%
Metals & Mining 97 1.16% 33.52% NA
Office Equipment & Services 24 16.68% 31.30% 30.80%
Oil/Gas (Integrated) 7 1.14% 8.01% NA
Oil/Gas (Production and Exploration) 330 0.32% 7.08% NA
Oil/Gas Distribution 78 2.93% 7.78% 3.44%
Oilfield Svcs/Equip. 148 4.11% 28.22% NA
Packaging & Container 26 24.47% 27.68% 24.70%
Paper/Forest Products 23 14.46% 12.58% 6.48%
Power 68 19.27% 29.22% 43.67%
Precious Metals 109 1.84% 90.15% NA
Publishing & Newspapers 37 14.32% 35.32% 34.67%
R.E.I.T. 238 1.72% 2.16% NA
Real Estate (Development) 18 1.97% 28.58% NA
Real Estate (General/Diversified) 11 15.32% 22.36% 8.49%
Real Estate (Operations & Services)

 

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