Skip to comments.Big Oil Profits Arenít Excessive ó The Left's Rhetoric Is
Posted on 04/04/2012 4:21:59 AM PDT by SeekAndFind
One of the most effective arguments used against the oil industry is that it earns "excessive" profits that must be taxed away. But as with the rest of the left's failed energy agenda, it's based on pure falsehoods.
With prices for crude above $100 a barrel, it's no surprise the news media are fixated on oil companies' "record profits."
Predictably, Democrats and others on the left use rising profits to bludgeon "Big Oil" and push more subsidies for money-losing "green energy" schemes while working to raise taxes and kill subsidies for oil.
"When the price of oil goes up, prices at the pump go up, and so do these companies' profits," President Obama explained last week, calling for higher taxes on oil companies.
"Meanwhile," he added, "these companies pay a lower tax rate than most other companies on their investments partly because we're giving them billions in tax giveaways every year."
A new attack ad for an Obama-linked political group excoriates the oil industry for its "record profits and ... billions in special tax breaks."
On closer inspection, those profits turn out to be nothing special. Government policies have driven up the price of oil, which has boosted oil companies' total profits. But their profit margins the best measure of industry profitability remain modest.
As of the third quarter of last year, the oil industry earned just 6.7 cents per dollar of revenue, less than the average for all manufacturing of 9.2 cents (see chart).
(Excerpt) Read more at news.investors.com ...
which is more expensive? A gallon of gas or a gallon of printer ink?
The lefties I work with are all up in arms about the subsidies that the oil companies receive. Not sure how to counter that. Any ideas?
Seems to me, the federal tax take by government on a gallon of gas, is greater than the profit by the companies that explored, drilled for, moved to refinery, refined and distributed to the gas station.
I have read that the oil companies make about 2 cents per gallon of gas. Conversely, the State of Ct makes .25 cents a gallon in taxes. So who's the greedy one?
I clicked over and read the whole article and it gave a lot of good arguments about why the left’s rhetoric is excessive.
It didn’t mention the fact higher earnings would attract more investment in the industry, leading to more supply, which then lowers prices - the simplest argument for the market system versus top-down price controlled system preferred by the leftists.
Perhaps that argument is considered to be too difficult to understand, or too hard for the average person to make the connection.
Ask for a list of all those supposed subsidies. From everything I know they are nothing more than business tax deductions enjoyed by every business. Subsidies means government is cutting a check to business, and that is just not true in the case of oil companies. True lefties should not even be buying gasoline with their pie in the sky ideas. Lefties should be far more concerned with the billions our tax dollars up in smoke with the demise of the much S U B S I D I S E D solar industry.
RE: The lefties I work with are all up in arms about the subsidies that the oil companies receive
Firstly, let’s be clear on what we mean by “subsidies”.
For example, Let’s say a mafia Don threatens your business if you don’t give his gang $10,000 a year in protection money. Then one fine day, he dies and a new Don takes over. He decides to only take $5000 from you. Is he “subsidizing” you to the tune of $5,000 now? or is he taking less from what you earn?
When the left talks about “subsidizing” big oil, they’re lamenting that they should be TAKING MORE of their money instead of the money they are already taking and then on that basis call the money they have not taken a “subsidy”.
Ask them to name the tax break they want to cut, the domestic manufacturing credit, foreign income, etc... (but let them name them, don't tell them which exist)
Now are they in favor or cutting this domestic business tax break to all industries, or are they trying to uniquely punish a particular industry?
The U.S. oil and natural gas industry does not receive tax subsidies. It delivers $86 million a day to the federal government in revenue, mostly income taxes.
There is not a single targeted tax credit in the Internal Revenue Code available to the oil and natural gas industry. The industry is allowed to take deductions to recover costs of doing business, which has been allowed to all businesses since the inception of our countrys income tax system.
More details at:
Naw...The supply is controlled to control the price...
You can say: Federal subsidies (which is another way of saying your money) for so-called green energy amounted to $24 billion in 2011. Thats not counting the $25 billion in loans primarily to producers of advanced vehicles, generators of solar power and manufacturers of solar equipment.
Oil companies got $3.4 billion in tax preferences."
Then this might be a good time to point out the difference between subsidies (giving someone else your money), government loans (lending someone else your money) and tax preferences (letting you keep your own money).
The petroleum industry is way, way down the list in terms of profits. The government makes more per gallon of gas that any big oil company does.
February 24, 2012, 10-K Annual Report
Page 56, Consolidated Statement of Income
All numbers below in millions of dollars.
Total revenues and other income = 486,429 (100%)
Sales-based taxes = 33,503
Other taxes and duties = 39,973
Income taxes = 73,257
Total Taxes = 146,733 (30%)
Net Income = 41,060 (8%)
- - - - -
Total revenues and other income = 383,221 (100%)
Sales-based taxes = 28,547
Other taxes and duties = 36,118
Income taxes = 52,959
Total Taxes = 117,624 (31%)
Net Income = 30,460 (8%)
- - - - -
Total revenues and other income = 310,586 (100%)
Sales-based taxes = 25,936
Other taxes and duties = 34,819
Income taxes = 34,777
Total Taxes = 95,532 (31%)
Net Income = 19,280 (6%)
- - - - -
If they say something like $41 Billion in profit is too much, reply with $147 billion in taxes is too much. Ask if they know how many people ExxonMobil employees, how many retires hold their stock, directly or through mutual funds?
What gives gas stations the right to raise a gallon of gas 6 cents overnight?
Burning liberal brains in the AM smells so sweet!