President Donald Trump recently lashed out at ExxonMobil and Chevron for “making too much money” in the wake of the companies each reporting huge quarterly earnings earlier this week. These companies have done extraordinarily well, booking almost $27 billion in profits between them over the past three months alone, partly the result of Trump’s war in Iran that paralyzed the oil supply chain globally. On top of that, Trump has neutered the federal government’s most effective tool to force these companies to share some of their profits with the American public: the corporate income tax.
Chevron’s profit for the last quarter was $12.1 billion, its largest three-month tally ever. ExxonMobil reported an even larger $14.5 billion profit in the quarter, its second-largest haul in the company’s history. Quarterly reports rarely include details on income taxes, and neither of these companies say much about how these record earnings are likely to be taxed. But if the recent taxpaying history of the companies is any indicator, both companies can expect to avoid taxes on more than half of these profits.
In the five years between 2021 and 2025, the two companies collectively raked in $124 billion of U.S. income and paid an effective federal tax rate of just 7.4 percent. By paying this tax rate instead of the 21 percent rate the law prescribes, Chevron and ExxonMobil collectively received $16.8 billion in federal tax breaks during this five-year period. Much of these tax breaks were likely attributable to the bonus depreciation tax breaks created by Trump’s 2017 and 2025 corporate tax cuts. If Trump’s 2017 tax law had not cut the official corporate income tax rate from 35 to 21 percent, these companies would have paid an additional $17 billion. That is a total of $34 billion in tax breaks for two oil companies from a president who now suggests they “give some of that back to the public.”
On its face, it’s doubly surprising that Trump should want oil companies to earn less: the on-again, off-again war the President has waged against Iran has created countless arbitrage opportunities for anyone in the oil sector to make a quick buck. And Trump has demonstrated friendliness to padding the profit margins of major oil companies quite recently.
In the run-up to the 2024 presidential election, Trump reportedly told a gathering of oil company executives that they should contribute $1 billion to his campaign because the incoming Trump administration’s fossil-fuel subsidies would make them far more in profits.
But this hardly needed to be said, since Trump’s 2017 tax law had already slashed the corporate income tax rate. For highly profitable companies like Exxon and Chevron, that represented a massive transfer of income from the public to shareholders. And let’s be clear, the tax savings did ultimately go to the shareholders, who benefited as the companies carried out an astonishing $127 billion of stock buybacks over the last five years.
If the Trump administration is now, at long last, genuinely concerned that oil companies are making too much money during a geopolitical crisis, it’s asking the wrong question. The issue isn’t simply whether oil prices temporarily inflated profits this quarter. It’s why Congress has spent years making it easier for some of the world’s most profitable corporations to keep a larger share of those profits in the first place.
From a nakedly political perspective, it’s easy to see why Donald Trump has changed his tune on oil-company profits so suddenly. Just three months away from a midterm election where his party faces losing its Congressional majority due to affordability issues, the price of gas is now roughly double what it was when Joe Biden left office, and Trump’s policies are clearly responsible. Playing the economic populist card is all Trump can do to give the impression that he cares about working families. But complaining about windfall profits while defending the government policies that helped produce them isn’t economic populism. It’s lying.
