NEW ANALYSIS: Big Oil Dodged $8.5 Billion in Federal Income Taxes in 2021, Senate-Passed Inflation Reduction Act Would Make Them Pay For Profiteering
These 19 U.S. Oil & Gas Companies Paid A Far Lower Effective Tax Rate Than Most Americans, But Senate-Passed Inflation Reduction Act Would Make Them Pay Their Fair Share, Including A Potential $1 Billion Fee On Their Share Buybacks
FOR IMMEDIATE RELEASE
August 8th, 2022
Contact: Erik Mebust, [email protected]
WASHINGTON, DC — While Congress moves toward historic action to address inflation, close tax loopholes, and tackle climate change, new earnings reports reveal an unprecedented wave of profiteering from Big Oil when families struggled under the crushing weight of high gas prices. Climate Power’s new analysis shows that 19 U.S. Oil & Gas companies managed to dodge $8.5 billion in taxes in 2021, paying an average effective tax rate of 2.86%—far below the nominal rate of 21%. The findings clearly demonstrate the need to take on the fossil fuel industry’s greed and enact tax fairness, and the House must act swiftly to close these loopholes by passing the Inflation Reduction Act.
Meanwhile, lobbyists representing fossil fuel companies and industry groups like the American Petroleum Institute (API) and the U.S. Chamber of Commerce continue to oppose the bill. In 2021, the 19 companies included in this analysis spent over $40 million lobbying Congress, and multiple lobby groups have announced six figure ad spends urging Senators to oppose the Inflation Reduction Act in recent weeks. While several fossil fuel executives praise the compromise measures included in the Inflation Reduction Act, their lobbyists are trying last ditch efforts to oppose it.
Under the Inflation Reduction Act, corporations would be required to pay a 15% minimum federal tax on all profits. Their earnings reports from 2021 show that these 19 companies would have paid $6 billion in additional federal income tax under that tax scheme.
Additionally, provisions in the bill would impose a 1% excise tax on stock buybacks. In Q2 2022 alone, the oil and gas industry reported $116 billion in profits, of which $66.9 billion have been returned to shareholders through stock buybacks and dividend payments. Under the stock buyback excise tax, these companies would be liable for $1.06 billion in additional federal taxes if they continued buybacks at the current rate. This provision would crack down on the profiteering oil executives exhibited last year, when they personally profited $99 million from selling shares in their companies.
The 19 companies included in the analysis are APA Corp, Cheniere Energy Inc, Chesapeake Energy, Chevron, ConocoPhillips, Coterra Energy Inc, Diamondback Energy Inc, Devon Energy, EQT Corporation, ExxonMobil, Halliburton, Hess, Marathon Oil Corp, Marathon Petroleum, Murphy Oil, Occidental Petroleum, Ovintiv Inc, Pioneer Natural Resources, and Valero Energy.