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The average profit, as we've noted before, is around 8 to 9 cents to the dollar. That compares with about 7 cents to the dollar for manufacturers and more than 15 cents to the dollar for computer makers. In short, oil profits aren't out of whack with the rest of industry. What doesn't get said is that while oil companies have profit margins of about 8%, about 12% of the price of a gallon of gas goes to the government in the form of taxes. When indirect taxes are included, the share is even higher. So who are the real price-gougers? From 1981 to 2006, the oil industry made $867 billion in profits. Yes, that's a lot. But over that same time, they paid total taxes of $1.2 trillion, Energy Department data show. And that doesn't include taxes of $519 billion paid to foreign countries. Please remember that the next time a politician vows to hit "Big Oil" with a windfall profits tax or some other idea. The tax won't be paid by the oil company; it will be paid by you, the consumer.

Ronald Reagan used to make the point that businesses don’t actually pay taxes, but that the customer who buys whatever goods and services are produced by the business are the ones who pay any business related taxes. The businesses pass along any tax as a cost of doing business.

And Ronald Reagan was attacked for making that point, because he was allegedly in bed with big business and against the “little guy”.

But the laws of economics are as immutable as the laws of physics. No business can stay in business indefinitely if they aren’t making a profit. And they can’t just “eat it” if gov’t comes along and decides to levy new taxes against business. Whether it’s payroll taxes on the hired help, business license fees, property taxes, exise taxes, or any other tax, you the customer, are paying those taxes through higher prices on everything you buy.