State and Federal Treasuries "Profit" More from Gasoline Sales than U.S. Oil Industry

Tax Foundation ^ | 10/26/05 | Jonathan Williams and Scott A. Hodge

[American_Centurion]

The "inequality" they talk about so much if promoted by their very own taxes on energy and food.

For socialism and communism to be implemented, "progressives" must have a downtrodden and dirt poor underclass whom they will purport to rescue. Capitalism is evil in their eyes because, almost without trying, it thwarts poverty for ANYONE who is willing to have a go at it. The only way to create more poverty is to heavily tax faceless entities like corporations which, of course, pass their losses to consumers to survive, or the "progressives" can just "nationalize" the industries themselves and directly enslave consumers.

The commies know full well what they are doing.

[navyguy]

ping for later

[HoustonCurmudgeon]

bttt

[conservative in nyc]

Exxon Mobil had an "obscene", record profit of $39.5 Billion last year. It also paid an "obscene", record amount of taxes worldwide last year. From FReeper bricks4all2's post on another thread:

To: IamConservative

more specifically is yet another XOM record, 2006 was the first year they funneled over $100 billion in taxes

................................... 2006 ..... 2005 ($millions)
-Income taxes........... 27,902... 23,302
-Sales-based taxes.... 30,381... 30,742
-All other taxes......... 42,393.... 44,571

Total taxes.............. 100,676... 98,615

17 posted on 02/02/2007 2:20:31 PM EST by bricks4all2

[cpdiii]

Transportation, that amounts to an annual gas tax burden of roughly $271 for every man, woman and child in the United States

If you add in the roughly 120 billion of taxes on the oil companies that becomes another 480 dollars per man woman and child for a total of about 750 bucks each. No company pays taxes. It is merely a cost of doing business and is passed on to the consumer. If the 9% profit the oil companies make is obscene, the government taxing authorities must be obscene x 5. Exxon is not screwing us, it is the government taxing authorities that are.

[cpdiii]

"I want to take those profits, and I want to put them into a strategic energy fund!"

Carter did this in his administration and the program has yet to produce one damn gallon of gas and sell it to the market. We are talking billions of dollars of tax money for the Energy Department.

[bmwcyle]

Hillary wants more so caught up.

[mewzilla]

If the Pubbies had any nads at all, they'd get some legislation passed that would require the prominent posting of all federal, state and local taxes at gas stations.

[conservative in nyc]

It is listed on the gas pumps here, but it's not prominent, and kind of abstract, since NY also charges sales tax on top of other gasoline excise taxes. What we really need is for receipts and/or the pumps themselves to show how much of the total bill is taxes. But that would cost gas station owners money, and probably isn't a good idea for that reason.

[mtnwmn]

They used to post these percentages on the gas pumps in Alabama. They no longer do it.

[Don W]

extraction is taxed (mineral rights fees)

*I* own the mineral rights to a bit of land. Are you telling me that by SELLING what I OWN, I am guilty of imposing a TAX?

Ignorant idiot.

[xcamel]

Funny, I always speak well of you...

Mineral rights fees sold by the BLM and states, and local entities.
and they even charge the fees on "dry holes"

And methinks thou doth protest too much - something you're not coming clean with here?

[Don W]

We already have our "Petro-Canada" stations doing this of their own volition. If you folks think that 47CENTS of tax PER GALLON(fed and state and local combined is tough to take, try OUR lot.

As a point of reference, the chaepest gas within 100 miles of my home (barring a ferry ride) is 90.4 cents (CDN) per LITRE!

That works out to just shy of USD$3 per USG, using .82 for a Cdn $.

Cry me a river, FRiend

[Don W]

Hereditary mineral rights, FRiend. I may have been a bit harsh. I've got a bee in my bonnet of late, and I've been trying to behave.....

[mountn man]

too funny...12.3 billion = flat profits

A little math education is warranted.

If YOU work 40 hours a week and make a profit of $50,000 in a year, then the following year YOU work 10% more, should you not make 10% more profit.

Another example would be that YOU're a farmer, YOU sell 100 ears of corn for a profit of $10. The next week YOU sell 200 ears of corn for a profit of $20.

Was it wrong for YOU to make a larger profit the second week than the first?

Next math lesson:

YOU start YOUR own business making widgets. Labor costs YOU $25,000, material costs YOU $25,000, Marketing costs YOU $25,000, and production costs YOU $25,000. It costs YOU $100,000 to produce widgets, which you made a profit of 10%, or $10,000.

The following year YOUR workers threaten that if they don't get a cost of living raise, they'll strike, and YOU'll lose your business. So now labor costs you $30,000. Also, China has been expanding, using more and more of Imaginum, the prime material used in making widgets. Material costs are $30,000. Production and Marketing both rise to $30,000 each. And once again YOU've made 10% profit. But last year you made $10,000 and this year you made $12,000.

Now a more in depth math lesson:

Lets combine lesson 1 and 2.

In YOUR 3rd year of business YOUR labor, material, production , and marketing costs all double. But so does YOUR production and sales.

This year YOUR profit it is once again 10%, but your dollar amount is $24,000. Twice what YOU had last year.

Boy are you evil. Wait till Hillary and Nancy get a hold of YOU.

Now to bring that into todays world of oil. If crude oil prices rise from $45 a barrel to $75 a barrel, a 66% increase, shouldn't the oil companies, if they keep the same profit margin, also make 66% more?

Also if consumers use twice as much gas as they did 10 years ago, and crude production costs stay the same, and profit margins stay the same, shouldn't the profits be twice as much?

Oil prices go up and down. As do gas prices. As do profits. But volume keeps going up. And as production goes up so do profits. So to say that profits were flat, when production increased, is really saying alot.

One last thing:

Imagine $12.3 billion in profit in year one. Re-invest that and get a return of 10%. That means year 2 should be $13.5 billion.

Do that again. And year 3 should be $14.8 billion.

Do that again. And year 4 should be $16.2 billion.

Do that again. And year 5 should be $17.8 billion.

One last thing. I used 10% as the magic profit ratio because that is roughly what the oil companies profits are.

10% is also a quite common number in manufacturing and also retail sales profits.

[conservative in nyc]

For the 12 months ending in July 2006 (I think):

DOW30	Oper Margin	Profit Margin
MSFT	37.20	28.45
INTC	31.46	22.31
KO	26.13	21.09
MRK	27.51	21.04
JNJ	26.47	20.61
C	24.46	20.44
PFE	29.90	15.76
AXP	18.68	15.39
MO	25.14	15.14
MMM	23.66	15.11
PG	19.42	12.73
MCD	19.52	12.72
GE	15.07	11.05
XOM	14.93	11.01
T	14.06	10.91
JPM	19.40	10.62
VZ	19.02	9.85
AIG	20.82	9.62
IBM	10.29	8.71
DIS	12.86	7.93
CAT	10.41	7.85
DD	8.07	7.71
UTX	12.13	7.18
HD	11.49	7.16
HON	8.97	5.98
AA	8.15	4.71
BA	4.02	4.69
WMT	4.90	3.59
HPQ	5.72	2.77
GM	-7.30	-5.49
Exxon's profit margin was 14th out of the 30 Dow components - middle of the pack. They just had more revenue. Note that the other company every liberal hates, Wal*Mart, has very slim operating margins - typical of the retail business.

[stylin19a]

I was commenting on the choice of adjectives for a 12.3 billion profit.

what's your point amd what does it have to do with that ?

[mountn man]

what's your point amd what does it have to do with that?

Your comment was "too funny...12.3 billion = flat profits ". I assumed that your comment about flat profits at being $12.3 were sarcastic. That $12.3 billion was too much, and undeserved.

I was trying to make the point that when someone gets into business, first and foremost, profit must be made. If a consistant profit ratio is maintained, and business level remains constant or grows, bottom line profit will naturally go up.

In the case of oil, if profit growth was flat, while production was increasing, it shows that something negative was going on.

But the libs would only see the bottom line number, and not take into account other factors in the equation. And still make big oil an evil boogie man.

[stylin19a]

perhaps I was too vague or trying to be too cute..sorry for that.

I understand what the article was trying to convey, 12.3 billion in profit was ordinary in comparison. but, forget comparison for a moment, a 12.3 billion profit absolutely impressive.

profit is never too much nor undeserved.
Unfortunately, publicly held companies are held to their own guidance.
Made 14 billion in profit last year, expect to make 15 billion this year and miss your numbers and only make 13 billion this year and you get hammered.

again...sorry