But Exxon Mobil’s tax rate is “lower than the average American’s,” Daniel Weiss, an energy expert at CAP, countered in an analysis that put the company’s U.S. federal income tax rate in 2010 at just 17.2 percent.
The average American doesn't pay 17.2 percent of their income in federal income taxes.
CAP is not only ignoring many forms of taxes either directly on Exxon Mobil, or on its products, its also taking the effective tax rate actually paid by XOM and comparing that to the nominal marginal rate for individuals. Well I don't know for sure that its doing that, but it can't be comparing the actual effective tax rates for both, since the actual percentage of income paid to the feds for most Americans is under 17.2 percent, in fact over a third and approaching a half or Americans have no net federal income tax liability.
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Try going here
smartmoney.com
As an example I tried a single person with $50k of income and $40k of taxable income (even though many people have more deductions than that). The effective tax rate is 12.25%
Trying someone poorer who is not itemizing, just taking the standard deduction. $35k of income, all taxable. 11.32%
A married couple making $100k with $80k taxable? 16.12%
If they have no children, mortgage, or other significant deductions, and they take the standard deduction? Of then you have something above Exxon's effective rate as quoted by CAP (ignoring a lot of the taxes that do hit Exxon-Mobil), but not by much, its 18.42%, and how typical is a couple making $100k with no significant tax deductions? That's a lot more than the average household income, its reasonable likely that they would have kids, a mortgage, deductible education or health expenses, or something. And if you do raise corporate taxes the tax has to effect actual people, the corporate structure pays the taxes in an accounting and legal sense, but not in a practical economic sense. The tax burden really falls on the employees, the customers, or the investors. A couple like this ($100k, no kids or mortgage, they are taking the standard deduction after all) probably has stock investments, so even if it all falls on investors (which is very unlikely, in a soft job market it probably mostly falls on employees, or potential employees who don't get hired, in a tight job market it might push consumer prices up depending on the elasticity of demand for the companies product). |
