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Sunday, June 08, 2008

No profits, no oil

Below is a paragraph from a great article.

For most of the 25 years between 1981 and 2006, says foundation president Scott Hodge, taxes collected from oil companies by federal, state, and local governments were nearly double the industry's profits in any given year. For all the clucking over ExxonMobil's $10.9 billion in profits last quarter, little attention was paid to its total tax bill in the same period: more than $29 billion.

Read the whole article by Jeff Jacoby.


Additional comment: June 9

I would like to restate Jacoby's statement for its proper effect. When ExxonMobil made a $10.9 billion profit last quarter, that was our money--the money of petroleum purchasers. Some of that profit will be plowed back into the company, as all good private enterprises do, to develop more oil production for we consumers to buy in the next decades.

Some of that profit belongs to stockholders who invest in the company in order to make a profit on the use of their money (stockholders take risks with their money). Average Americans are stockholders, many of them owning mutual funds of which oil stocks are a share of the portfolio. So when Congress castigates ExxonMobil for a large profit, or Clinton or Obama aim to throw a windfall profits tax on the oil companies, they are sticking their finger in the eye of the average American, insulting the average American for making too much profit.

And then when they snub ExxonMobil by not recognizing that the company paid $29 billion in taxes in the last quarter, they are snubbing the average American because the consumer paid all those taxes in the end. Congress has the audacity to condemn Big Oil in a capitalist economy, believing that consumers and stockholders are too occuppied or too ignorant to realize it's their money in the end.

Multiply all of ExxonMobil's profit and taxes by the rest of the oil companies which are in business. That is the enormity of the audacity of Congress towards we the consumers and we the stockholders.

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