Posted on 02/11/2007 4:11:44 AM PST by yoe
Exxon Mobil had huge 2006 profits. The government received huge revenues as it has for decades, totalling in the hundreds of billions. Even though energy companies get special tax breaks, those breaks simply reduce those final huge payments. Instead of using Washington newspeak, congress should eliminate the tax breaks and bring the corporate tax rate down from 35% to 30%, the average in Europe, or better yet to 12 1/2 percent, the corporate rate in Ireland. Consumers, business and government would all benefit.
Hillary Clinton wasted little time telling the nation how she feels about profits, especially when those profits come from a favorite target of the left-Exxon Mobil.
Last week, Mobil announced it had earned $39.5 billion in 2006 making it the most profitable company in U.S. history.
There is probably much resentment among even clear thinking people when they hear this number all by itself.
If, however, many of those same people heard the full story including the hundreds of billions in taxes paid by the company, how much those taxes have to do with higher prices at the pump, the years when there was little or no profit for energy companies, the squeeze unnecessarily put on by the tree-huggers, adding further to higher prices and more dependency on foreign sources, it might lessen the resentment.
Taking this scenario in a different direction, are the benefits in hundreds of billions of dollars received by federal, state and local governments, from Mobil; the number of houses built, cars purchased and all goods consumed by Mobil's 83,700 employees, along with another huge sum of taxes paid by these employees to all levels of government, again likely in the billions.
What we have is simply the capitalistic system at work. This, of course is not the way Hillary and those on the Left see it.
For those who want to accentuate the negative-most Leftist thinking is about finding negatives-there is the higher price at the pump and a suggestion of gouging.
For 20 years or so, congress and the Federal Energy Commission (FEC) have held many hearings with absolutely no findings of gouging.
We all dislike paying the higher pump price, but remember about 6 years ago we were paying as little as $.99 a gallon because worldwide demand was much less than it is now.
Prices were 2 to 3 times higher than ours in many countries then and they are still much higher now. On a comparative basis, pump prices have always been a bargain in the U.S.
What Is A Reasonable Return On Capital Rayola Dougher, of the American Petroleum Institute, said "oil companies' earnings per dollar of sales are below, or in line with, those of other industries. Exxon Mobil made about 9.8 cents on every dollar of sales in 2005. In comparison, McDonald's Corp. earned 13.8 cents and Coca-Cola Co. earned 21.2 cents on every dollar of sales.
Oil companies charge consumers based on commodity prices set on international markets," Dougher said.
But last week, knowing what red meat she had for her audience-the Democratic National Committee-Hillary said:
"I want to take those profits and put them into an alternative energy fund that will begin to fund alternative smart energy alternatives that will actually begin to move us toward the direction of independence."
Notice Hillary did not say, take some of those profits. She seemed to have fire in her eyes at the thought of the government winding up with all those billions for some socialist program.
Recall, she wasted no time in going after 14% of the economy, soon after Bill Clinton’s election, attempting to nationalize health care.
Now, it seems, she has a great cause for stirring up the socialistic, profit hating, ACLU, Blame America/Hate America, U.N. loving, George Soros loving, Jihad Jane loving, crowd.
Mick McNesby is a former tax advisor, consultant and negotiator. He was a frequent guest on political talk shows in Atlantic City, N.J., discussing the benefits of the lower cost of government. He can be visited at conservative-politics-infofind.com.
The topic of Exxon's profits came up recently when a retired postal worker made mention of the Exxon "crooks". I asked him if he knew the evil Mr. Exxon.....then I asked him if he knew who owned Exxon....and lastly did his pension plan own any Exxon stock. Needless to say the conversation ended.
Perhaps Hillary would like to mention the amount of corporate taxes Exxon-Mobil paid to the federal government last year. If she wants to be intellectually honest in this discussion, she could show this figure next to figure for the profit EARNED by Exxon Mobil.
Then perhaps the smartest woman in the world can explain what she expects will happen to an industry (that our entire economy depends upon, btw) when the government takes away it's profits.
She's clearly not bright enough to explain this, most socialists aren't.
Just look at what Chavez is doing to Venezuela. This is a clear illistration of what Hillary and company have in store for the US.
"Let's Have a Conversation" is Hillarious. No "chat" on this issue from the premeditated prima donna. Exxon/Mobil should take their profit and close up shop. That'll take away the fuel for this gasbag.
Exxon is FANTASTIC. They actually go get stuff, refine it, and let me buy it (NOBODY forces me to but I AM forced to pay for the dumb FEC) sell it to me and it is very useful.
Let's Nationalise Hilary and stick her fat butt in a Zoo in ANWAR. As a Collectivist she isn't, but she should be, an endangered species
When Hillary has TAKEN Exxon's profits. who's profits will she TAKE next.
Like Chavez she is Nationalising Exxon and other gas companies. What will she Nationalise nxt.
She will nationalize all oil companies.
Estimated 2007 Gasoline Price Breakdown & Margins Details
Scroll to the bottom. Though these numbers are for CA, Fed, state, and local govt's make far more off a gallon of gas than do the oil companies.
So who're the people robbing consumers blind...?
Carolyn
It is easy to pillory the big oil companies, but let her windfall tax proposals be enacted and a lot of ordinary people will feel the pinch in their pension funds and mutual accounts, not to mention standing in line for gasoline.
she had to hide the marxism to win. she could'nt.
Sad to say but she knows thsoe profits will be paid as dividends to shareholders, many who are retired and living off of those payouts.
And Government gets more revenues when taxes are CUT. But for the DEMOCRAT(sp) Party to get the anger vote they must talk about taking profits, raising taxes and giving away free stuff.
The given reason for higher pump prices is that the price of crude was higher. Naturally the oil companies would pass along those prices. The law of price elasticity states that as prices rise, consumption falls. We saw the mania for fuel-efficient cars during that period, and people were post-poning trips and minimizing their use of fuel.
Assuming a certain degree of inelasticity in demand for gasoline (you have to get to work, so you have to buy it even at $6 per gallon), we can assume that the volume of consumption would have fallen only somewhat, or perhaps stayed flat (I have no statistics at hand, this just is basic economics). With that assumption, and record oil company profits, we have to assume that they didn't make that money on volume (selling say 25% more gasoline with the same margin). They did it by increasing their margins (raising their prices more than the incremental cost of the crude they buy).
Simple economics makes the case that they were "gouging" at least somewhat to have made these profits. I'm not suggesting that we tax them more, or punish them. If we let Hillary get away with taking profits from Exxon to fund their destruction (alternative energy resources), we essentially live in a Communist dictatorship.
I'm just saying that "higher prices at the pump" can't be the whole story. Exxon couldn't have made these profits on volume. They did it by charging more at an opportune time.
Don't worry, if she is their nominee this statement, and a few others, will bury her in the general election.
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.