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
This is a perfect set up for crony capitalists and their whoring representatives. The representatives get lobbied (i.e. bribed) to do the bidding of those corporations that spend their profits bribing congressional whores. Those corporations that spend their profits on R&D, etc. are left to the vagaries of the market.
Changing the current system is near impossible. Anyone who suggests a tax rate reduction is accused of being a tool of the corporations. Anyone who suggests the elimination of a deduction or tax credit is accused of being a socialist.
A better idea would be to have a relatively low tax on gross receipts with no deduction of any kind or tax credits of any kind.
That way businesses would compete on quality of products/services and pricing rather than on government whoring.
Of course that will never happen, but one can always dream.
IBTZ
Blogpimp troll pong.
The economic illiteracy needed to buy into the idea that adding taxes to an industry that earns a paltry 6 to 7 % rate of return doing something absolutely essential to our well being and national defense because they make “too much” profit, which is about a third of all the taxes paid on what they produce, will somehow do anything but further ratchet up prices and hurt the economy is stunning.
(Hint: People can’t cut back on driving much more, so the price curve is reaching inelasticity, and the costs will just get passed on to the people at the pump - and those buying food, clothing, and everything else because most stuff is delivered to point-of-sale by truck.)
That so many Americans buy into is even more stunning.
That a Freeper, even a relative newbie, does is astoundingly stunning.
The oil companies shouldn’t be taxed at all!
“Big Oil” didn’t pay billions of dollars in taxes...YOU DID!
Yep, maybe. With the conclusion of the FReepathon, the phaser banks are fully charged.
Hmmm.
Drive by post? Spewing economically illiterate obama talking points? No responses? Blog pimping?
Gonna have to add my IBTZ to yours.
Shout it loud and often!!
Besides, since when do we hold in contempt companies that are actually making a profit?
BTW, those profits pay dividends and returns to City and State pension plans.....and here the Gubmint wants to disparage them.
Talk about stepping on your own ****
1) Since 1977, US oil companies have paid 584 Billion in corporate income tax.
2) Since 1977, ALL American oil companies have earned just under 600 billion in net profit.
3) Since 1977, American Oil Companies have collected and turned over 100% of additional fees and taxes to the Federal government, that were collected from consumers at the pump... in the amount of 1.27 TRILLION dollars! Now exactly who is ****ing whom?
LLS
Guilty!
What is infuriating is seeing otherwise rational people imply that the oil and gas industry is somehow dishonest or fraudulent for making a fair return on huge sums of capital invested at very high risk.
No one hands the industry anything; they are simply allowed to deduct real costs of doing business just like any other business. The way I understand the concept, income equals revenue less costs. What the democrats are attempting to do is tax these companies on money they did not make, because it was paid out to defray real costs.
Once again the media obligingly follows the party line and redifines a well understood term like “tax deduction” and begins to call it a “subsidy.” Before long, even people I once took to be sensible and conservative start smoking this dope, calling these tax provisions “loopholes.” Case in point, John (Bonehead) Boehner.
The fact is that these provisions are necessary to encourage investment of capital in a business where a $5,000,000 investment may be totally lost on a dry hole. To me it is amazing that the oil and gas industry has succeeded in keeping us as well supplied with oil and gas as they have.
The states and the federal government gas taxes take a bigger junk of the $4.00/gallon price at the pump than do the NET profits on that $4.00 by the oil companies - less than 8 cents on the dollar after the dealer and the distributor take their cut.
January, 2011
Combined State & Fed. Taxes Per/Gallon
State......State Tax....Fed.Tax.Total
California...47.7....18.4....66.1
New.York.....47.2....18.4....65.6
Hawaii..........45.8....18.4....64.2
Connecticut...45.2....18.4....63.6
Illinois...........42.8....18.4....61.2
Michigan.......37.7....18.4....56.1
Washington...37.5....18.4....55.9
Indiana.........37.2....18.4....55.6
Florida.........34.4....18.4....52.8
Nevada..........33.1....18.4....51.5
Rhode.Island....33.0....18.4....51.4
Wisconsin......32.9....18.4....51.3
North.Carolina..32.8....18.4....51.2
Pennsylvania....32.3....18.4....50.7
West.Virginia...32.2....18.4....50.6
Maine...........31.0....18.4....49.4
Oregon..........31.0....18.4....49.4
Ohio............28.0....18.4....46.4
Montana.........27.8....18.4....46.2
Nebraska........27.3....18.4....45.7
Minnesota.......27.2....18.4....45.6
Idaho...........25.0....18.4....43.4
Kansas..........25.0....18.4....43.4
New.Hampshire...25.0....18.4....43.4
Utah............24.5....18.4....42.9
South.Dakota....24.0....18.4....42.4
Maryland........23.5....18.4....41.9
Massachusetts...23.5....18.4....41.9
D.C.............23.5....18.4....41.9
Delaware........23.0....18.4....41.4
North.Dakota....23.0....18.4....41.4
Kentucky........22.5....18.4....40.9
Colorado........22.0....18.4....40.4
Iowa............22.0....18.4....40.4
Arkansas........21.8....18.4....40.2
Tennessee.......21.4....18.4....39.8
Alabama.........20.9....18.4....39.3
Georgia.........20.8....18.4....39.2
Louisiana.......20.0....18.4....38.4
Texas...........20.0....18.4....38.4
Virginia........19.7....18.4....38.1
Vermont.........19.6....18.4....38.0
Arizona.........19.0....18.4....37.4
Mississippi.....18.8....18.4....37.2
New.Mexico......18.8....18.4....37.2
Missouri........17.3....18.4....35.7
Oklahoma........17.0....18.4....35.4
South.Carolina..16.8....18.4....35.2
New.Jersey......14.5....18.4....32.9
Wyoming.........14.0....18.4....32.4
Alaska..........08.0....18.4....26.4
National
Average: .......29.7............48.1
At a theoretical $4.00/gallon, in California, the state of California keeps 47,2 cents, the federal government takes 18.4 cents, for a total tax take of 66.1 cents. And, at a rate of about 8.75 cents on the dollar (of THEIR revenue, not counting the retailer and the distributor), the oil company might NET something under 35 cents on the gallon, or something near half what is taken in taxes.
Notice also that in all but four states the net take in taxes in higher than the net profits of the oil suppliers.
So who is it that is “gouging” on the retail price at the pump?
In how many states does the gasoline tax revenue go 100% exclusively to the state’s roads; exclusively back directly to the consumers paying the tax?
The other problem with the gas taxes is that in an environment when the basic cost of the product is rising, encouraging people to buy less, means they are encouraged to drive less, which means they are encouraged to consumer fewer gallons of gas, which means the higher the tax (like California) the greater a decline in gas tax revenue.
In fact, it was not so long ago that the California legislature acknowledged that: “Oh, gee, people ARE driving less, so we’re getting less from the gas tax”; and concluded: “so, we should raise the gas tax”. Notice who now has the highest gas taxes and the highest gas prices. Stupid is as stupid does.
Their idea of a "subsidy" in this case is to give a break on that percentage.
I am tired of hearing about the crooked oil companies. The government makes much more off of every gallon of gas than the oil companies do. If they were really crooked, couldn’t the oil companies do better than that? The recent dramatic rise of gas prices is attributable to the policies the Obama regime has been pursuing, not because of the oil companies flexing their muscles to screw over the consumer. Between the Obama regime inflating the hell out of our money supply with QE1 and QE2, shutting off all drilling in the gulf and denying oil companies the permits to drill elsewhere the current rise in fuel prices was easy to see coming. For example, Shell recently spent billions of dollars to prepare a lease for drilling in Alaska. The Obama regime had the EPA deny them their permit to actually drill. Do you think that decision made oil cheaper? The Senate hearings were also easy to see coming as that is what the ‘Rats do every time oil prices predictably rise as a result of their idiotic, Sierra Club driven policies. ‘Rats have been calling in the oil company executives to “investigate” them every time oil prices have increased for the last 40 years. In all those “investigations” they have never found anything illegal. The only reason the elected ‘Rats do this is to deflect blame away from themselves, where it belongs, and to convince their stupid, business hating supporters that they are on their side against the big, evil, crooked oil companies. I have noticed that they never investigate the oil companies when the prices go back down. Obama said during his election campaign “under my policies, the price of energy will necessarily sky rocket.” Given what his regime is doing to hinder/destroy the oil, coal, nuclear and natural gas industries in the USA, that is the only unequivocally true statement I have ever heard him make. I do not understand how anybody can pin the blame for high oil prices anywhere but on the ‘Rats and Obama. Why would any sane person expect anything different to happen to oil prices under the policies implemented by Barky’s regime?
I hate RATS. If I remember correctly, ExxonMobil paid an effective 47% tax rate - that is too high, and I hate anti-American, anti-Capitalist whining about people making a decent profit.
That’s 4 billion the government doesn’t take from them/us. Big difference from giving.
The same people bitching about the profits of the oil industry are the people who want US gas prices to be in line with that of Europe. If that were to ever happen, what do these rocket scientists think will happen to oil industry profits? Shell, Exon, and Chevron will be crapping in taller cotton. These people are morons, they do not understand the effects their idiotic policies have.
I have no problem with the profit the oil industry makes. They provide a vital service along with thousands of good paying jobs.
Explain to me, please, how raising their taxes will reduce the cost of a gallon of gas?
The Federal and State governments make 10 times as much PROFIT as the oil companys do..
for DOING LITERALLY NOTHING..
The same governments make profit also on refining and transporting oil and petroleum products..
Same with gas, coal and nukes..
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