Posted on 08/06/2008 1:03:27 PM PDT by AlanGreenSpam
WSJ - REVIEW & OUTLOOK
What Is a 'Windfall' Profit? August 4, 2008; Page A12
The "windfall profits" tax is back, with Barack Obama stumping again to apply it to a handful of big oil companies. Which raises a few questions: What is a "windfall" profit anyway? How does it differ from your everyday, run of the mill profit? Is it some absolute number, a matter of return on equity or sales -- or does it merely depend on who earns it?
Enquiring entrepreneurs want to know. Unfortunately, Mr. Obama's "emergency" plan, announced on Friday, doesn't offer any clarity. To pay for "stimulus" checks of $1,000 for families and $500 for individuals, the Senator says government would take "a reasonable share" of oil company profits.
Mr. Obama didn't bother to define "reasonable," and neither did Dick Durbin, the second-ranking Senate Democrat, when he recently declared that "The oil companies need to know that there is a limit on how much profit they can take in this economy." Really? This extraordinary redefinition of free-market success could use some parsing.
Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any "windfall" tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we're missing some Obama-Durbin business subtlety.
Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon's profits don't seem so large. Exxon's profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%...
(Excerpt) Read more at online.wsj.com ...
Email this article to all your Democrat acquaintances and ask them to try to argue against the points made herein. They won't be able to! How can one argue against the comparison of oil company "profit margins" vs. other businesses. They should be going after Google with its 25.3% profit margin and not Exxon with its meager 10% margin.
Any time an idiot mentions the phrase "excessive profits," you know they're a Marxist and don't believe in the freedoms of individuals or groups of individuals in a corporation!
Politician like BO know how business operates. They squeeze them for taxes or contributions. They exist to fund them and programs to get them re-elected. Period.
or APPLE, and they got a TAX break
http://online.barrons.com/article/SB121675096082474261.html?mod=googlenews_barrons
For the third quarter, Apple had EPS upside from significantly better gross margins, at 34.8% versus guidance of 32.9%. About three cents of EPS upside came from a lower tax rate at 29% versus guidance of 31%. It is also guiding fiscal 2009 to 30% gross margins versus consensus of 34%.
I think there should be a windfall profit tax on all the money that certain politicians rake in while they are in office. The Clintons came to the Washington basically broke and left office as multimillionaires. Sounds like a windfall to me.
government windfall profit bookmark
Liberals hate “Big Oil”. I think the reason is that they basically hate America and oil has been huge in making our country strong and productive. It’s the same reason why they hate religion and traditional family values.
I want a winfall donations tax on presidential candidates for all money donated to their campaigns. Then I want a windfall profits tax on all earnings of US presidents on after they have served in office.
Our nation thrives on INNOVATION and is diminished by State-controlled, ideological interference.
This is why Obama is fundamentally incompetent to be our leader.
My suspicion is that before the Dems are done, Exxon is going to be a corporation based in Dubai, not even doing business in the US. The Dems have already driven Halliburton to move to Dubai.
Exxon is currently selling off its retail gasoline operations in the US (i.e. its gasoline stations). Once they are done doing that, they won’t have much in the way of indispensable US assets. They own oil lands, but thanks to the US Congress, they don’t own nearly as many as they once did, and Congress (with its use it or lose it policy) is intent upon taking what few remaining US oil assets they do have. It would be very easy for Exxon to sell its office buildings and refineries. They could be out of the US altogether inside just a couple of years.
Well, some people think that oil companies and speculators manipulate the oil markets and drive up the price of gas. They don’t think that increased demand from other countries such as China and India should affect what they pay at the pump.
I wonder how much a windfall profits tax would really generate in tax revenue? I also wonder how many oil companies would have to pay it. Aren’t many oil companies multi-national companies, with business activites and headquarters outside the U.S.? Their activities overseas will be beyond the reach of our IRS, won’t they?
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”
Ronald Reagan
I heard that the oil company profits come out to about 15 cents a gallon of gas at the pump. So, if we could somehow compel them to deliver gas at their own cost as a public service, gas prices would only drop 15 cents. Yes the dollar amount of profit is big, but hundreds of billions of gallons of gas are sold each year.
The other thing nobody talks about, is that much of the “windfall” profit is paid out as dividends to shareholders. Many people with stock market funds or 401K type funds own a piece of these companies, and see their investment grow based on Exxon, etc. doing well financially.
In fact, any CPA’s out there, aren’t corporations under US law required to pay out a certain amount of their retained earnings as dividends to stock holders? It’s not like they just get to keep the money.
The other good point to make is that any business needs to make a profit to continually re-invest in business equipment and facilities needed to make the business run.
I really hate the Empty Suit with a burning passion. It grows and grows and grows.
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...is insuffiently descriptive, you can annotate the headline within brackets e.g.:
What is a 'Windfall' Profit? [Obama's fraudulent, Marxist Big Oil tax]
We need to change the language. A windfall profits tax is nationalization of the oil business. Unlike Hugo Chavez, the American socialists don’t screw with running the business, they just confiscate the rewards of being in business.
The socialists need to be lined up and shot before they are allowed to destroy American business.
How can a retroactive tax on a specific company be constitutional? Equal protection violation?
A lot of big funds, in which Americans have an interest, have investments in the oil companies. For example, the NY State Pension funds have large investments in Exxon.
Instead of hurting regular Americans, why doesn’t Obama pay an excess profits tax on the millions he made on his books? His profit amounts to a much bigger percentage than the 10% return on investment the oil companies got. (I read that he has stashed most of his money in tax-free bonds.)
I read an article in Car and Driver which stated that while the price for a barrel of oil quadrupled in U.S. dollars over a set time period (10 years I think), it has only doubled when paid for in euros.
Our government's fondness for spending what they don't have, has devalued our money to the point where we just can't buy what we used to be able to buy. The article goes on to say that if the dollar had maintained parity with the euro, gas would probably be just under $3.00 a gallon.
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