Shock News of the Day: Rick Perry's Energy Plan is the Same as Exxon's

Weigel
Reporting on Politics and Policy.
Oct. 24 2011 2:21 PM

Shock News of the Day: Rick Perry's Energy Plan is the Same as Exxon's

It's always nice when you can cut out the middleman. Over at Exxon Perspectives, an official company blog that I clearly don't read enough, the energy company's vice president of public and government affairs Ken Cohen tells Congress to let the tax breaks stick around, and

From 2006 to 2010, the five largest oil and gas companies operating in the U.S. incurred $377 billion in income taxes – putting their effective tax rate at almost 44 percent. On average, the federal government receives $86 million a day from oil and gas companies when you add in rents, royalties and bonuses to income taxes. ExxonMobil’s U.S. tax bill for the first half of 2011 was $6.7 billion, a figure that exceeded our $5.5 billion in operating earnings in the U.S.
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Wow! Exxon pays more in taxes than it takes in! That sounds wrong, doesn't it?

It is. Cohen uses "operating earnings" to refer to profits after a whole bunch of payments and costs are taken into account. Here on planet earth, Exxon raked in $10.7 billion for the first quarter and $10.68 billion for the second. Even if we use Exxon's figures, it's not paying the government more than 100 percent of profits. It's paying 31.3 percent.

Why take on Exxon, though? Isn't this a soft target? No: Rick Perry is. The Cohen sob story informs us that "more than 1 million new jobs" could be created if Congress listens to Exxon. The source is a study by the consulting firm Wood Mackenzie; the study was paid for by the American Petroleum Institute, the energy industry lobbying/PR combine of which Exxon is a member. Rick Perry's energy/jobs plan promises "more than a million jobs, all across America." The source for that is... Wood Mackenzie. For some reason, what sounds unbelievable coming from an energy company sounds good enough for a candidate's jobs plan.

INEVITABLE CAVEAT: Trust me, you don't want to go back and look at the estimates of how many "green jobs" would be created by the stimulus, versus how many were created. But that in itself doesn't argue that a similar self-analysis by a more profitable industry will also, accurately report how many jobs some favorable treatment would create.

David Weigel is a reporter for Bloomberg Politics