Fox & Friends has recently been using Fox Business host Stuart Varney's regular appearances to attack efforts to end tax subsidies enjoyed by the oil industry, despite Varney having recommended “get[ting] rid of them” less than a year ago. On this morning's edition, Varney was aided by co-host Brian Kilmeade, who stated as “fact” that oil companies pay a much higher effective tax rate than other companies, a claim that is not only disputed but has been estimated by one tax activist group to be significantly misleading:

VARNEY: Since when do we have taxpayer giveaways to the oil companies? Show me the check, Mr. President.

KILMEADE: Define it correctly.

VARNEY: Show me the check. All companies in America, when they invest in equipment, get a tax break on that investment. The oil companies included. The president says that is a subsidy. It is not. It is not a payment of money from the Treasury to an oil company. All that -- I mean, do you get a payment from the Treasury when you have a break on your mortgage, on your interest? Of course you don't. He's confusing everybody with this use of the word “subsidy.”

KILMEADE: And here's the fact: Oil companies pay an effective tax rate of 41.1 percent when the average corporate tax's effective rate is 26 percent. They're already paying on average $86 million a day in taxes while hiring 9.2 million people.

Later in the segment, co-host Gretchen Carlson bemoaned the fact that President Obama might find public support for legislative efforts to roll back oil and gas company tax subsidies, complaining that the public wouldn't “dig deep to find out all the stuff that Brian just said.” But Kilmeade didn't “dig deep” at all. The numbers he cited were provided by the American Petroleum Institute (API), the trade association for the oil and natural gas industry:

America's oil and natural gas industry supports 9.2 million jobs and 7.7 percent of our nation's GDP. The industry provides higher-than-average wages and helps ensure our nation's energy security. In the process, the industry generates tax revenues that contribute billions of dollars every year to federal, state and local government.

As a tremendous source of revenue that fuels the U.S. economy, major energy producers pay their fair share: the oil and natural gas industry pays income taxes, royalties and other fees totaling nearly $86 million every day. The industry also pays the federal government significant rents, royalties and lease payments for production--totaling more than $100 billion since 2000.

Supporting our economy, U.S. energy companies pay income taxes at an effective rate far higher than most other manufacturing companies. In 2010, oil and natural gas industry income tax expenses (as a share of net income before income taxes) averaged 41.1 percent, compared to 26.5 percent for other S&P Industrial companies.

But despite Kilmeade presenting these oil industry-provided numbers as “fact,” the actual tax rate that oil companies pay has been estimated by others to be much lower. In fact, a report by the Citizens for Tax Justice (CTJ) showed that the effective tax rate paid by companies like Exxon Mobil is significantly lower than the tax rate paid by companies in other industries, when you don't count taxes paid to other nations. A March 23 Reuters analysis explained how the oil industry arrives at its inflated numbers:

The difference between the effective tax rate cited by Exxon and lower rates cited by groups such as Citizens for Tax Justice, a left-leaning tax activist group, has several causes.

One is that the company counts foreign taxes paid, while Citizens for Tax Justice does not. Another is that Exxon counts deferred taxes, as well, but the consumer group does not. Still another is which profits are counted by the company and critics.

There are other technical variations shaping the calculations of effective tax rates, but these subtleties are often lost in the sound bites of the ongoing tax policy debate.

Reuters also provided a graphic illustrating the discrepancy between the API's estimates and the CTJ estimates:

An June 1, 2011, CTJ analysis estimated Exxon Mobil's effective tax rate as averaging 14.2 percent from 2008-2010, having paid $2,783,000 in taxes on more than $19 million in profits. Additionally, The New York Times highlighted an estimate by Aswath Damodaran, a professor of finance at NYU's Stern School of Business, which put the effective federal tax rate for “petroleum producing” industries at 11.3 percent in 2009:

The API uses methods such as including taxes paid to foreign countries to claim that oil companies' tax rates are much higher than that of other companies, which CTJ does not include. What is clear, however, is that the discrepancy shows that the industry-provided numbers are not “fact,” despite Kilmeade presenting them as such.