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.

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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.