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The Associated Press via the Sacramento Bee reported that “Exxon Mobil Corp. earned $10.7 billion … its highest quarterly profit since the third quarter of 2008…. However, Exxon officials noted that sluggish business investment, lower consumer spending and high debt would continue to weigh on the economy.”

Let’s do some math – Exxon earned $10.7 Billion this past quarter. Yet Exxon and other big oil companies receives $2 Billion to $3 Billion per year in tax subsidies. If divided equally, then Exxon would get $400 to $600 million per year, $100 to $150 Million per quarter. The subsidies amount to 0.93% to 1.4% of Exxon’s profits of $10.7 Billion this quarter, and 0.108% to 0.16$ of Exxon’s annual revenues of $370 Billion for the year ended 12/31/10 (Google Finance). This is equivalent to giving someone earning $50,000 per year a gift of $54 to $81.

A lot of people need help: American college students need help paying tuition, Americans on Medicare and Medicaid need help paying their medical bills, and Americans on Unemployment need help paying for food, people trying to design and build a renewable sustainable energy infrastructure. But we are helping oil companies.Why?

Let’s look again at the numbers. For the year ending Dec. 31, 2010, Exxon’s Gross Revenues were $383 Billion. Gross Profits were $107 Billion, and Income Before Taxes were $53 Billion. Profit was 27.9% of Gross Revenues.  Income before Taxes was 13.8% of Gross Revenues.

And according to Valeri Vasquez, at the Center for American Progress, here, Exxon’s tax rate is 17.6%. The nominal corporate rate is 35%.  With profits of $53 Billion last year, rather than receiving subsidies. Exxon should have paid $18.55 Billion in taxes last years. With profits of $10.7 Billion last quarter, Exxon should have paid $3.745 Billion.

On May 12, 2011, Batarzyna Kilmaninska and Jim Snyder reported on Bloomberg.com, (Exxon Leads Defense of Tax Breaks Democrats Want to Repeal) that

Exxon Mobil Corp. (XOM) Chief Executive Officer Rex W. Tillerson and four counterparts defended $21 billion in U.S. tax breaks that Democrats are seeking to recapture to reduce the federal deficit.

Executives from Exxon, Royal Dutch Shell Plc (RDSA), Chevron Corp. (CVX), ConocoPhillips and BP Plc (BP/) said costs may rise and gasoline prices increase if Democrats succeed in eliminating the benefits. The plan is “counterproductive,” Tillerson told the Senate Finance Committee at a hearing today in Washington.

Senate Democrats are proposing to raise oil and gas taxes by about $2 billion a year for 10 years, arguing that widening deficits are a threat to the economy and sacrifice is required. College students are giving up federal help, and so should the companies, said Senator Charles Schumer, a New York Democrat.

“We have to choose priorities and right now we have a huge budget deficit,” Schumer said to ConocoPhillips (COP) CEO James Mulva. “Do you think that your subsidy is more important than the financial aid that we give to students to go to college?”

We see the answer to this question – “NO!” in the Exxon’s own report: “Exxon officials noted that sluggish business investment, lower consumer spending and high debt would continue to weigh on the economy.”

Sima Gandhi, writing on American Progress, April 14, 2010, here, noted that tax subsidies for big oil, about 88% of total federal subsidies in 2006, are not necessary for the health of the oil industry.

While the AP article noted that oil demand worldwide is expected to hit 89 million barrels per day this year, we also think that a much better use of the money would be to subsidize the transition to a clean energy economy, making homes energy efficient, building new transmission lines, and extending the deployment of wind, solar, geothermal, and other clean, renewable, sustainable technologies.