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 ...
Vote for me, and I’ll steal from the evil rich corporations and bribe each of my voters with $1000. - That’s the breed of politicians we have now - foul, thriving scumbags, brazen and proud of their obvious plundering, cheered on by a growing wickedly immoral populace that embraces such policy.
Oprah (Harpo Productions) earned $385 million last year. That sounds like a windfall to me.
Here’s from another post:
As George Bernard Shaw once wrote, “A government that robs Peter to pay Paul can always depend on the support of Paul.”
We see this all the time in modern American politics. Paul believes in his right to personal liberty, especially economic equality. But in order to pay for his personal economic equality, he also believes in his right to rob Peter of his privately earned belongings, and any politician willing to rob Peter on Paul’s behalf, will have Paul’s support.
Obama is Paul’s New Messiah
If you ask most Americans if they want their federal government to manage the energy industry the same way they managed Social Security and Medicare (into bankruptcy), they will say “hell no!”
But for a lousy thousand bucks, all of the Pauls, the “what’s in it for me constituency,” will jump in line.
Alaska State Goverment did that to the oil companies this past year.
And what about the windfall profits of Hollywood’s summer movies? The Dark Knight is raking it in...
Regarding Apple’s 34% gross margins, note there’s a difference between GROSS margins and NET margins. We have to be sure we’re comparing apples and apples (no pun intended).
Plutarch -
Thanks for the advice. I didn’t know that and will do so next time...
true, the margin is 50% on the iphone
This article is stunning! Someone dares to question Obama in the press?
Someone better tell Obama about the “windfall profits” John Edwards made when he was practicing law...why not take some of the profits of lawyers.....talk about hypocrites.
Exactly!
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