Posted on 05/16/2011 3:08:53 PM PDT by Snark
It’s a ritual. Every time gas prices skyrocket, the Big Five oil companies get called on the carpet by Congress. Last week, they outdid themselves defending their obscene profits and ridiculing the idea of cutting their $4 billion annual tax subsidies ($21 billion over the next decade) from the U.S. government—that is, from you.
"ExxonMobil’s first-quarter earnings of $10.7 billion are up 69 percent from last year. Other oil companies are also scoring record gains. The five biggest oil companies together report more than $35 billion in profits."
http://www.cargurus.com/blog/2011/05/16/big-oil-makes-a-spectacle-of-itself
I realize that there is extremely large overhead with the oil industry and the $10.7 Billion doesn't all go into their pockets but Mobil's net last year was 8 Billion dollars.... And we hand them 4 billion a year (and $4.15 a gallon). Infuriating.
We don’t “hand” them anything. It’s an upfront tax break on the cost of exploration. By the way, you need to post a live link.
Lets see, Conoco Phillips.
11bl in earnings
8bl in US taxes
3bl in foreign taxes.
Yup, their profits are certainly obscene.
Their profit in terms of percent of sales is not out of line at all.
The last I read, something like 8.75%.
The big numbers come from big volume and if you have not thought about it, with big volume comes much much bigger risk.
For instance, if I sell you the only thing I own and it is in the back of my pickup, there is no risk to speak of. If I have to give it away, there was only one item. Unless it was a gold brick or a diamond the size of a bushel basket risk is not of the magnitude that will destroy me..
When you deal in millions of gallons of fuel and have manufacturing and distribution facilities all over the world, one mistake can kill you.
Besides, where does that “obscene profit” go?
To stockholders.
What do they do with it?
Surely you don't think they keep it under the bed.
Buy more stock, maybe in the same company but likely split it up and buy into other companies.
Why is that important? Well think about when Lowe's was opening 20 or 30 new stores a year, as was Walmart.
Where did that money come from? Mostly from sale of stock.
If there is not a good return on stock, either in dividends or in appreciation in value, no one buys it and no new jobs are created.
Besides, if you have any investment program of any kind at all, it is very likely that there are some petroleum based companies in your portfolio.
Most people that rant and rave about “obscene profits” have zero understanding of how our system really works.
It’s the first time I’ve posted a news article. I had my fingers crossed on whether it would post correctly or not.
Sorry about that.
And you are right about the subsidies, but we are ticked off at GE and their annual tax subsidies. I don’t HAVE to buy a GE dishwasher or even fly in a plane with GE engines. I have a choice there. I HAVE to pay $4.15 a gallon when these guys are literally raking in money hand over fist. These guys are and have been for many years, crooked. Unless you are Amish, there’s no way around handing them money.
"The CEOs from the five major oil companies -- which together booked $36 billion in profits in the first quarter of 2011 alone -- went to the Senate on Thursday to try to justify the $4 billion in tax giveaways they're receiving this year."
You see, I know that for every dollar of profit, oil companies have paid about three dollars of tax. I also know that for the fourth quarter of 2010, Exxon-Mobil made a profit of about 2 cents on every gallon of gasoline sold, whereas the federal and state governments made over 50 cents "windfall profit" per gallon through taxes for doing absolutely nothing in locating, drilling, refining, and delivering the gas.
I also know that most of those "tax giveaways" go to small, independent oil companies, not the big corporations. I know that eliminating long standing tax deductions (the things you guys mislabel as "giveaways") will help big oil by eliminating competition. Hmm, which big oil company gave Barry Obama 20 billion to use for something that still hasn't happened? What is Barry planning to do with the loot? I know that Barry's favorite "green" technologies have received far more subsidies than the oil industry and they produce and will produce almost nothing of America's energy. So, in dollars spent for unit of energy gained, wind, solar, ethanol, and geothermal are among the biggest wasters of taxpayer money in the history of energy.
Something happened.
It's people in the millions seeing the ruin that Barry's Soros-directed policies have made of a strong and prosperous nation and determining that they're not going to be fooled again.
Something is happening.
It's the last grains of sand in the hourglass rapidly draining away. Get ready to find private sector employment.
It has been shown time and time again that the big oil companies DON’T get that $4 billion tax break. Congress made sure of that in 1975. In addition, for every gallon that the oil companies sell as gasoline, they profit appx. 2 cents. Federal, state and local gov’ts average 48 cents per gallon.
One more: Exxon/Mobil, Shell, Chevron, Conoco Phillips and BP control less than 7% of the world’s oil reserves COMBINED! Approximately 82% of the world’s reserves are controlled by Foreign Governments, most of whom don’t like the US. So, we demonize the oil companies? I say DRILL!
If I owned a ton of gold and the price goes way up then I profit more too without secretly doing anything but having an asset that goes up in value.
Where were these Democrats complainingabout collusion when I was paying $1.38 for gas six months before Obama was elected?
Their profity margin is actually 6.2% which is relatively small in comparison to many other corporate entities that no one seems to bitch about.
Check out: http://mjperry.blogspot.com/2011/05/oil-profit-margin-ranks-114-out-215.html
What we hand them is no more or less then a lot of other companies. If you want to get mad, get mad at the Obama administration and the liberal progressive azzholes for refusing to open up areas for drilling along with the speculators that are also driving up oil prices. Oil companies don’t set the price of oil.
Microsoft : 31.85% profit margin.
McDonald’s Corporation : 19.78% profit margin.
JPMOrgan Chase : 17.86% profit margin.
Nike : 10.30% profit margin.
General Electric : 8.73% profit margin.
BP : 8.07% profit margin.
ConocoPhillips : 5.20% profit margin.
These arguments about “obscene” profits are completely stupid.
(source: http://ycharts.com/companies/)
GE’s subsidies are just that, subsidies for their BS green tech projects that nobody wants or needs.
Big Oil’s subsidies are not that at all. They are standard tax deductions just like any capital intensive business. You’ve bought into too much of the libtard spin as your baseline template.
Hey, how about we limit the oil companies profits to the same percentage as the taxes charged by the US government?
Lets see, according to the DOE in Nov 2010, 14% of every dollar goes to taxes on gasoline. How about we limit Big Oil’s profits to 14%?
[research the profit margin of your “Big Oil” very carfully before you answer that question]
Then ask yourself, how much of the corporate tax burden is passed on to consumers to maintain that profit margin.
LOL ... yer getting hammered ...uh .. and not to pile on. but .. AND ANOTHER THING! Part of the “Big Oil Subsidy” nonsense is ...uh ... nonsense. The Big Boys haven’t used Depletion Allowances since 1975. That one is aimed squarely at the “Little Guys”.
Little Guys produce half of our domestic crude and they have no way of passing on the cost of a new theft (on the part of Government) to consumers. They will throttle back on production. I guarantee it.
And to further back up your point. Please watch the video. A former Democratic congressman points out the danger of Obama continuing to “misrespresent” (we call it lie) this point:
Anyone that wants to send this to the guy who wrote the piece, go for it.
They put almost all of it back into the ground. It is not like they have a giant vault somewhere. Also, the Intangible Drilling Cost right write off is the same manufacturing write off that manufacturers (like steel for GM cars, etc.) In addition, the Oil and Gas Industry pay more taxes than any other domestic industry. Most of the liberals know all of this, but they go to where the money is.
Big oil should stop selling to the dam gov., do an Atlas Shrugged on ‘em.
1) buy an electric car
2) grow your own sugar beets, put in a still and brew your own ethanol or butanol
3) raise peanuts and produce your own diesel from the peanut oil
4) gather used vegi oil from food joints and reformulate into bio-diesel
5) Take public transportation (not a 100% option as the buses still use oil/gas/diesel)
6) convert your vehicle to run on Natural Gas (may not be a 100% option as some of the NG comes from big oil)
7) Buy, feed, maintain and ride a horse
8) ride a bicycle
9) bum rides from your friends (again, not a 100% option as they are paying big oil and will eventually want some money to cover their costs)
10) Walk
There are pros and cons with each of those options. Most people don't like the cons so much that they are willing to trade dollars to avoid those inconveniences.
IT IS A CHOICE
BTW, what is wrong with making a profit? And just exactly when does a profit become obscene? Is it the $100 Millionth dollar? If the company stays below $100 M have they avoided being obscene? Lets put this into personal income perspective. When is a raise obscene for you?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.