Exxon, Big Oil Profits Evil Only Until You Weigh Their Tax Bills
Don't knock Big Oil for not needing a bailout, writes Robert Bryce
Compare that history with that of presidential appointees on financial matters. For years, multimillionaire Wall Street bosses have traveled the revolving door between Wall Street and Washington, and their experience is lauded as essential. Consider two recent examples: Robert Rubin and Hank Paulson. Obama's new secretary of the treasury, Timothy Geithner, was president of the New York Federal Reserve. While some could argue that Geithner is not actually from "Wall Street," he has certainly worked in the neighborhood.
Of course, these days Geithner and other top financial advisers are trying to figure out how to get the U.S. economy moving. And one particular area of concern must be falling tax revenues. Consumers have dramatically cut their retail spending, which is reducing sales tax revenue. Motorists are staying home in record numbers. The Federal Highway Administration recently reported that the number of miles traveled on U.S. roads in November 2008 fell by 5.3 percent, the biggest annual decline since the agency began collecting data in 1971. Less driving means less fuel tax revenue.
Those declining tax revenues make the taxes paid by energy companies like Exxon that much more important. Governments, both here in the United States and around the world, are increasingly strapped for cash. They have far more ways to spend money than they do new sources of revenue to pay for that spending.
The punch line is abundantly obvious: Taxpayers should be thankful that Exxon is making record profits because record profits mean huge tax revenues for government. And if that point isn't obvious enough, it should be noted that just two days after Exxon announced its record profits, several news outlets reported that General Motors, which is borrowing $13.4 billion from the federal government in order to stay afloat, is lobbying the feds for another favor. It wants Congress to waive its tax bill. The amount of GM's pending tax bill: $7 billion.
Reader Comments
A sad look at serfdom
I wish when people complained about tax levels, the same big business lines could be used for individuals. Perhaps if I make $40,000 a year, but I spend $30,000 a year keeping myself alive, fed, sheltered and whatnot, I could complain that my taxes are 2.5 times higher than my net (after payments + taxes) profit?
But really that's not the point, the point of this article is the monopolistic transfer of wealth away from persons to corporations. The article itself says we should be "grateful"(!) that Exxon is making money, because, let us face it, they one of the few that does so. We should be grateful that big businesses are willing to employ any of us, sell us their product and pay any money into the system at all. A gradual slide into corporate lordship.
Would you like some Oil with that Baloney?
As the comments here show, people are not fooled by ridiculous articles like this one which fails to address the need to switch to renewables and reduce deadly pollution. We really do have the technology to run electric vehicles with zero emissions which by the way can also be great looking and accelerate no no gasoline car ever could. Solar energy and electric cars should be pushed RIGHT NOW beside oil cars and then we will see some amazing things happen in the market and in peoples minds. Look at teslamotors for more info.
Hydrogen fueled cars & Exxon profits
The media trumpeted Exxon's $45.2 billion profits in 2008 (about 10% of total revenue), generating debate on whether it was only "fair" because the company paid over $116 billion in taxes (US News article by Robert Bryce, Feb.17, 2008). These amounts are irrelevant to the real issue facing the U.S. economy and the auto industry: the exhaustion of oil is inevitable sometime in the 21st century (especially after millions in China and India are driving the new mini-cars their industries are designing). The U.S. now imports 25% of its oil from the Middle East and Venezuela (where many politicians make a point of hating the U.S.) Oil fueled vehicles are a major factor in CO2 emissions linked to global warming (which the U.S. has treaty obligations to reduce). The first Honda CLARITY cars -- which run on non-polluting hydrogen fuel cells -- are now being leased in California; GM is tooling production of the hydrogen powered Chevvy EQUINOX (with first leasing scheduled for this coming fall). All other auto makers are developing hydrogen cars, some of which have electric motors (and are therefore hydrogen-electric hybrids). Why not offer several $billions of stimulus money as NO INTEREST LOANS to US auto makers, contingent on speeding the transition to hydrogen. Stimulus funding could also be set aside to compensate for accelerated tax write-offs for big oil companies provided they use windfall profits to fund the transition to hydrogen fuel. After all, hydrogen comes from water: no need to import anything. And what comes out of the tail pipe? Hydrogen hits oxygen and it's just water.
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