One thing that I have realized about the rhetoric surrounding green energy initiatives and the proclamations by Team Obama glorifying companies like General Motors while vilifying others like ExxonMobil is that the claims and the facts are worlds apart. Voters are led to believe that evil oil companies like ExxonMobil are getting a free pass and not paying their fair share while the supposedly patriotic GM is an American success story which now contributes to society and builds miracle cars like the Chevy Volt which will free the US from foreign oil dependence. One set of facts that is very easy to check on is the amount of taxes each of these companies pays. Following are the facts from the SEC annual financial reports (10Ks) of GM and ExxonMobil.
In 2011 ExxonMobil made about $73 billion and paid about $31 billion in tax. That is a tax rate of greater than 40%; assumedly more than Warren Buffett’s secretary. The much heralded GM made about $9 billion. General Motors not only did not pay any taxes on the income, they received a benefit of $110 million. This as the hypocrites in office continually play the class warfare card as they campaign on the perceived benevolence and success at GM while implying that the rich and companies like ExxonMobil are not paying their fair share.
Look, I have no great affection for big oil companies. I just get tired of the constant misrepresentations that come out of the White House and the constant references to what a great job the Administration did by throwing billions of taxpayer dollars at GM so that they can continue to reward the politically powerful UAW. Geez, the company was given about $50 billion of US taxpayer money and about another $11 billion from the Canadian government, how can they not appear to be doing well? Ford was able to ride out the economic downturn by borrowing an extra $20 billion. Our efficient government needs at least three times that for their GM turnaround “success” story.
To add insult to taxpayer injury, tax law was changed so that GM could benefit from tax loss carryovers that give them a free ride for years to come saving them billions of dollars in taxes while even those making significantly less than Buffett’s secretary pay more in taxes. The abuse continues while our President tries to misdirect the public’s anger towards the wealthy and oil companies and away from a failed energy policy that sees gas prices approaching $5 a gallon (coincidently the amount GM CEO Dan Akerson said he wanted to see) and the crony capitalism that rewards companies like GM.
Perhaps I am bothered because I was a GM bondholder advocate and saw first hand the political ugliness that transpired throughout the GM bankruptcy process. In addition to all the billions of dollars GM received, they were relieved of their obligations to bondholders which amounted to about $27 billion. I worked with a group of bondholders in an attempt to uphold contract law and get fair representation for bondholders, to no avail. The bondholders, most of whom were retired senior citizens relying on the income from their bonds, were vilified as their wealth was redistributed to the UAW. The reason this was done was the same as the reason we now see the vilification of the wealthy and oil companies. If you are part of a class of individuals in this country that is not politically popular, you are subject to discrimination. And for the majority of Americans that don’t care, that’s fine; until it happens to you.
Mark Modica is an NLPC Associate Fellow.