Posted on 02/03/2007 1:08:19 PM PST by conservative in nyc
High gas prices and strong oil company earnings have generated a rash of new tax proposals in recent months. Some lawmakers have called for new “windfall profits” taxes—similar to the one signed into federal law in 1980 by President Jimmy Carter—that would tax the profits of major oil companies at a rate of 50 percent. Meanwhile, many commentators have voiced support for the idea of increasing gas taxes to keep the price of gasoline at post-Katrina highs, thereby reducing gas consumption.
However, often ignored in this debate is the fact that oil industry profits are highly cyclical, making them just as prone to “busts” as to “booms.” Additionally, tax collections on the production and import of gasoline by state and federal governments are already near historic highs. In fact, in recent decades governments have collected far more revenue from gasoline taxes than the largest U.S. oil companies have collectively earned in domestic profits. (Click here for previous analysis of state, local and federal gas taxes.)
According to data compiled by the U.S. Department of Energy’s Energy Information Administration, the domestic profits of the 25 largest oil companies in the U.S. have been highly volatile since the late 1970s.
As illustrated in Figure 1, between 1977 and 1985, the oil industry recorded relatively high profits—averaging nearly $33 billion per year, after adjusting for inflation. These good times were followed by ten years of relatively flat profits, averaging just $12.3 billion per year. In 1996, profits began to rise again but have been anything but stable, ranging from $9 billion to nearly $42 billion per year. Between 1977 and 2004, the industry’s domestic profits totaled $643 billion, after adjusting for inflation.
In contrast, federal and state taxes on gasoline production and imports have been climbing steadily since the late 1970s and now total roughly $58.4 billion. Due in part to substantial hikes in the federal gasoline excise tax in 1983, 1990, and 1993, annual tax revenues have continued to grow. Since 1977, governments collected more than $1.34 trillion, after adjusting for inflation, in gasoline tax revenues—more than twice the amount of domestic profits earned by major U.S. oil companies during the same period.
As illustrated in Table 1, since 1977, there have been only three years (1980, 1981, and 1982) in which domestic oil industry profits exceeded government gas tax collections. In the remaining years, gasoline tax collections consistently exceeded oil industry profits, reaching a peak in 1995 when gas tax collections outpaced industry profits by a factor of 7.3.
Politicians regard capitalism as a cash cow to be milked for goodies.
Fixed it. Fuel taxes come directly from the pockets of consumers, for that matter Oil company profits do too. Additionally, if the idiot pols raise the gas tax to reduce consumption, then the Oil companies profits' suffer even more. Dems are retarded.
I guess our commie pols expect the oil companies to also give back their profits - work for nothing.
Before this is over the oil companies will be lucky if the pols think they should even be allowed to break even.
I think that most of us can agree that anything Jimmy Carter did to hurt the oil companies is bad business.I remember those lines around the block.
As for a strategic energy fund lets just call that what it is. Highgrade theft,experimentation in boondoggles, and political Bull. Just money thrown in the toilet
We all know that any tax on oil companies will be paid by the consumer, only a fool would think differently/ Hilary already knows that she just thinks we are all fools. And judging by her support there ARE many fools out there.
too funny...12.3 billion = flat profits
I didn't know that. Makes the Dims statements even more ridiculous, and I didn't think they could be. Obscene profits? More like obscene confiscatory taxes.
NO Government on this planet OUTLAWS fuel taxes..
The United States should be THE FIRST government to outlaw fuel TAXES..
If the receipts that the gas pumps spit out showed the taxes the Federal, State and Local governments were sucking up there would be no question as to who the "big" business was. It would also be nice to be able to write off those confiscations on our income taxes.
Thanks for posting this. I have argued with friends that the government makes more than the oil companies and they don't believe me.
Here in Spokane, Washington, we enjoy the highest prices in the country thanks to the Washington state tax (kept in place despite a surplus). We also have a environmental tax on gasoline due to stringent requirements which make our gasoline more expensive and less profitable for refineries to make (less supply).
Despite this, our local media continues to run those "X on your side" investigative reports that fail to mention these facts. Our liberal congresswoman Maria Cantwell also called for hearings into our gas prices. I bet the hearings won't mention these facts either.
No, the next step is nationalization. What the hell; we have a Socialist Party in power now, so why not?
It is ironic that the left greens want high gas taxes to further their agenda yet high gas taxes hurt the poor the most.
The "inequality" they talk about so much if promoted by their very own taxes on energy and food.
Always trying to screw the public, I see.
Thanks for that link.... a cut and paste of the most important part -
"also noted the company's (Exxon) U.S. tax obligation in the past five years was about $60 billion -- about $20 billion more than its U.S. net income for the same period.""
Thanks for the data! I'm going to go take it to where it needs to be heard.
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