The Ugly Truth About Big Oil Companies

[BSMcCauley]

Not any more than you are taxed on your gross income, corporations, people, and trusts are taxed on their net income, not there gross. I know from which I speak. And I also know that big oil is using every accounting trick available to beat their income down to the tiny little amount that it is! Equipment is written off at a rate much faster than is the actual life span for that equipment. I am not saying that they are cheating, those are the rules as they are written but don't think for a second that they aren't doing every thing they can to beat those profits down.

"Profit" is what is left over after paying expenses. By the way, taxes are an expense -- a HUGE one in this example. Corporate dividends are paid on profits and does anyone out there seriously think dividends are paid on the pre-tax figures?



And another thing: if you take a serious look at the numbers, the by far lion's share of an oil company's gross income is in the upstream (crude oil) side of the business in this current market environment and NOT in the downstream (refining & marketing) side of the business. And thanks to the envirojerks, not very much of that crude oil is being produced inside the United States. So guess where that means the bulk of the oil company's money is being earned? You got it: foreign investments. And since they are not allowed to explore for oil in a meaningful way at home, it is the foreigners who are cashing in on all that investment.



So your big liberal politicians are hosing you two ways: taxes, both directly on you and indirectly on all the things you buy, and again by running industry out of the country and all their good-paying jobs with them.

 

[HBarlow]

Amen! Well said.

 

[JDiepstra]

Sorry to everyone who is supporting big oil here but RGardner is correct.



You pay tax on profits.



Unless the oil companies are in the 70% tax bracket (which doesn't exist) there is no way that this article is giving good numbers.

 

[JDiepstra]

Actually, even my own numbers are wrong, it would be more like in the 250% tax bracket since they pay more in tax than they make in profit! That's impossible!

 

[rbattelle]

Again, I'm no accountant, but it seems to me there are many taxes imposed on post-tax money.

Property tax, for example. If I had a $5,000,000 house whose taxes per year were, say, $200,000, then the amount I pay in taxes would FAR exceed my income. My property taxes have nothing to do with my income or how much profit my business takes in. If I make $50B, my property taxes remain $5M. If I lose $50B, my property taxes remain $5M.

Isn't that possible here? I would imagine there are myriad other taxes on businesses that work the same way property tax works on me.

Ryan

 

[JFaulkner]

Here is another article on Exxon taxes. (here is a direct link)



Corporate profits receive a lot of media attention, but what receives considerably less attention are the corporate taxes paid on corporate profits. Do a Google search for "Exxon profits" and you'll get about 8,000 hits. Now try "Exxon taxes" and you'll get a little more than 300 hits. That's a ratio of about 33 to 1.



I'm pretty sure that Exxon's tax payment in 2007 of $30 billion (that's $30,000,000,000) is a record, exceeding the $28 billion it paid last year.



By the way, Exxon pays taxes at a rate of 41% on its taxable income!



[Update: The $40. 6 billion and $39. 5 billion figures are after-tax profits. For 2006, Exxon's EBT (earnings before tax) was $67. 4 billion, it paid $27. 9 billion in taxes (41. 4% tax rate), and its NIAT (net income after tax), or profit, was $39. 5 billion. ]



Over the last three years, Exxon Mobil has paid an average of $27 billion annually in taxes. That's $27,000,000,000 per year, a number so large it's hard to comprehend. Here's one way to put Exxon's taxes into perspective.



According to IRS data for 2004, the most recent year available:



Total number of tax returns: 130 million



Number of Tax Returns for the Bottom 50%: 65 million



Adjusted Gross Income for the Bottom 50%: $922 billion



Total Income Tax Paid by the Bottom 50%: $27. 4 billion



Conclusion: In other words, just one corporation (Exxon Mobil) pays as much in taxes ($27 billion) annually as the entire bottom 50% of individual taxpayers, which is 65,000,000 people! Further, the tax rate for the bottom 50% is only 3% of adjusted gross income ($27. 4 billion / $922 billion), and the tax rate for Exxon was 41% in 2006 ($67. 4 billion in taxable income, $27. 9 billion in taxes).

 

[BigPapa]

Your not going to get me to feel sorry for Exxon or anyone else bringing in that kind of money.



Evidently they have plenty to go around. Remember last April when they gave the main exec almost $400 million in a retirement package? That's over $11 million a year if he's 65 and lives to be 100 just to retire!



As I stated then and I'll repeat again, I have no problem with anybody making as much as they can, that's my personal goal, but to make it stepping on the backs of others is wrong I don't care who you are or who you work for.



Scott

 

[HBarlow]

... ... ... ... ... ... ... ... . but to make it stepping on the backs of others is wrong I don't care who you are or who you work for.



Scott

How did investing billions of $$ in equipment and operations, exploring, drilling, transporting, refining, transporting again, and delivering at the retail level a product that almost everyone wants to buy and is willing to purchase at the current prices become "stepping on the backs of others. "



Is it "stepping on the backs of others" when your grocery store charges $4 for a 1/2 gallon of milk? How about your dry cleaner charging $5 (or whatever) to dryclean a pair of slacks?



Is your dealer stepping on your back when he charges you $40k for a new Ram?



Does your company and industry, whatever it is, step on the backs of others when you sell a product or service at a price that will allow you to earn a wage and your company's owner to make a profit?



You have no right to diesel fuel at the price you want to pay. It costs what is costs. If you divide the price of a barrel of crude, almost $120/bbl by 42 gallons or whatever it is that makes up a barrel of crude, you will find most of your cost went directly to the middle-east or wherever the crude was purchased. Add all the transportation and refining costs plus the outrageous taxes the oil companies pay and there's not much left.



OIL COMPANIES ONLY MAKE APPROXIMATELY $0. 10 (THAT'S ONE THIN DIME) PER GALLON.

 

[rbattelle]

Every one of these threads comes down to exactly 2 types of people.

1 - Those who believe it is criminal (or nearly so) that oil companies should make so much money.

2 - Those who believe oil companies are free to do what they want.

Not one time, in all the myriad fuel-price threads I've ever read, has anyone from group 1 moved to group 2, or vice-versa.

Ryan

 

[HBarlow]

Ryan,



You are absolutely correct and the same is true in all the threads in the political forum.



However, there may be a few who quietly read the posts, consider the opinions of both sides, and maybe, just maybe, think "you know, those folks were correct and I understand better now. " Some never post, they just lurk silently. It is for them that I post in threads like this.



If someone doesn't challenge some of the wrong-headed thinking here some will accept it as truth.

 

[BigPapa]

How did investing billions of $$ in equipment and operations, exploring, drilling, transporting, refining, transporting again, and delivering at the retail level a product... .

Their invested billions came out of their billions of profits.

... . that almost everyone wants to buy and is willing to purchase at the current prices become "stepping on the backs of others. ".

You've got "WANTS" messed up with "NEEDS" there Harvey. I don't WANT fuel, I NEED fuel. Everyone's "willing" to pay the current price because they HAVE to, not WANT to.

Is it "stepping on the backs of others" when your grocery store charges $4 for a 1/2 gallon of milk? How about your dry cleaner charging $5 (or whatever) to dryclean a pair of slacks?

Don't know where your buying your cow juice there Harvey, but your getting raped on it just like we are on the diesel fuel. My dry cleaner doesn't charge me a dime to clean my jeans. Again, I don't NEED to wear slacks that have to be cleaned. I WANT to.

Is your dealer stepping on your back when he charges you $40k for a new Ram?

Here again Harvey, I WANT a new truck. I don't NEED a new truck. My poor old '95 that I bought used is serving me well now with almost 300K on the clock and will continue to do so for many more miles. When it finally gets to the point where I NEED another truck, I'll buy another used one.

Does your company and industry, whatever it is, step on the backs of others when you sell a product or service at a price that will allow you to earn a wage and your company's owner to make a profit?

I work at a motorcycle, ATV, PWC dealer. I sell WANTS, not NEEDS.

OIL COMPANIES ONLY MAKE APPROXIMATELY $0. 10 (THAT'S ONE THIN DIME) PER GALLON.

We NET the same thin dime after paying our expenses, wages, and taxes that your "Big Oil" does except there's a whole lot fewer of them. Again, we sell WANTS, not NEEDS. No one has to HAVE what I sell, they WANT it.

Add all the transportation and refining costs plus the outrageous taxes the oil companies pay and there's not much left.

Your poor Big Oil that that has so many inherent costs in their business, that pay so much in taxes, and comes out with "not much left", again, had enough money to give one man $400 million. That doesn't happen where I work. Doesn't happen at the local Dodge Dealer. Doesn't happen at my grocery store. Doesn't happen at my Electrical Co-op. Not all the money's going to the middle east, seems like there's an awful lot of it left over here.



Fuel, Harvey, is a NEEDED energy source just like electricity. If my electric bill had gone up like fuel prices have gone up and the electric companies had posted profits along the order of your Big Oil, something would have been done. Now, don't get me wrong, I'm not calling for Government to get involved, but something NEEDS to be done by someone. As I've said before, I don't have the answers but I know when I'm getting it put to me and you won't catch me taking up for the poor Big Oil companies.

If someone doesn't challenge some of the wrong-headed thinking here some will accept it as truth.

My thinking may be "wrong-headed" to you in oil country, but I guarantee it's not "wrong-headed" to the majority of America.



Scott

 

[rbattelle]

If someone doesn't challenge some of the wrong-headed thinking here some will accept it as truth.

That's a good point.



BigPapa - no one is suggesting we shed a tear for big oil's tax burden. Rather, Harvey was merely pointing out that big oil is paying its fair share into the economy, through taxes, jobs, and infrastructure.



Ryan

 

[Sled Dog]

Their invested billions came out of their billions of profits.







You've got "WANTS" messed up with "NEEDS" there Harvey. I don't WANT fuel, I NEED fuel. Everyone's "willing" to pay the current price because they HAVE to, not WANT to.









Don't know where your buying your cow juice there Harvey, but your getting raped on it just like we are on the diesel fuel. My dry cleaner doesn't charge me a dime to clean my jeans. Again, I don't NEED to wear slacks that have to be cleaned. I WANT to.







Here again Harvey, I WANT a new truck. I don't NEED a new truck. My poor old '95 that I bought used is serving me well now with almost 300K on the clock and will continue to do so for many more miles. When it finally gets to the point where I NEED another truck, I'll buy another used one.







I work at a motorcycle, ATV, PWC dealer. I sell WANTS, not NEEDS.







We NET the same thin dime after paying our expenses, wages, and taxes that your "Big Oil" does except there's a whole lot fewer of them. Again, we sell WANTS, not NEEDS. No one has to HAVE what I sell, they WANT it.







Your poor Big Oil that that has so many inherent costs in their business, that pay so much in taxes, and comes out with "not much left", again, had enough money to give one man $400 million. That doesn't happen where I work. Doesn't happen at the local Dodge Dealer. Doesn't happen at my grocery store. Doesn't happen at my Electrical Co-op. Not all the money's going to the middle east, seems like there's an awful lot of it left over here.



Fuel, Harvey, is a NEEDED energy source just like electricity. If my electric bill had gone up like fuel prices have gone up and the electric companies had posted profits along the order of your Big Oil, something would have been done. Now, don't get me wrong, I'm not calling for Government to get involved, but something NEEDS to be done by someone. As I've said before, I don't have the answers but I know when I'm getting it put to me and you won't catch me taking up for the poor Big Oil companies.







My thinking may be "wrong-headed" to you in oil country, but I guarantee it's not "wrong-headed" to the majority of America.



Scott

You are CORRECT. Thank You. Big OIL is RAPING US, because it CAN.

They were making good profits at $10 barrel.

Hugo Chaves (Ven. ) says he could sell us U. S. fuel at 25 cents/gallon.

I wish he was running for President. I'd vote for that.



If you want the UGLY Truth watch

YouTube - Lindsey Williams - The Energy Non-Crisis - Part 1 of 8

all 8 parts.

 

[BigPapa]

Harvey was merely pointing out that big oil is paying its fair share into the economy, through taxes, jobs, and infrastructure.

Ryan,



I'm not saying Big Oil ISN'T paying their share of taxes. I'm not saying Big Oil isn't paying their way period. I'm saying Big Oil is gouging the American Public with their high prices and reaping RECORD profits from it while the American economy is hitting the bottom.



I've heard enough of "supply and demand" is driving the prices up. It just ain't true.

• Supplies are in line with what they were a year ago.
  
• Demand for Gasoline is where it was a year ago.
  
• Demand for "distillates" (diesel fuel and heating oil) is DOWN.
  

First it was the hurricanes that caused the price increase, then it was the Chinese demand, then it was the THREAT of hurricanes, now what is it?



Scott

 

[BigPapa]

Hugo Chaves (Ven. )



I wish he was running for President. I'd vote for that.

Sled Dog, that's just MESSED UP.



Scott

 

[Sled Dog]

Sled Dog, that's just MESSED UP.



Scott

Twenty-four cents per gallon.

Check out the link I posted above, for complete understanding.

Then you'll know what MESSED UP is.

 

[JFaulkner]

You are CORRECT. Thank You. Big OIL is RAPING US, because it CAN.

They were making good profits at $10 barrel.

Hugo Chaves (Ven. ) says he could sell us U. S. fuel at 25 cents/gallon.

I wish he was running for President. I'd vote for that.



If you want the UGLY Truth watch

YouTube - Lindsey Williams - The Energy Non-Crisis - Part 1 of 8

all 8 parts.

This has to be the most ignorant post I have ever read.





This person has absolutely ZERO knowledge about anything related to the world market, anything political or that the world isn't flat..... utterly amazing!

 

[Sled Dog]

Ryan,



I'm not saying Big Oil ISN'T paying their share of taxes. I'm not saying Big Oil isn't paying their way period. I'm saying Big Oil is gouging the American Public with their high prices and reaping RECORD profits from it while the American economy is hitting the bottom.



I've heard enough of "supply and demand" is driving the prices up. It just ain't true.

• Supplies are in line with what they were a year ago.
  
• Demand for Gasoline is where it was a year ago.
  
• Demand for "distillates" (diesel fuel and heating oil) is DOWN.
  

First it was the hurricanes that caused the price increase, then it was the Chinese demand, then it was the THREAT of hurricanes, now what is it?



Scott

Another HIGHLY Accurate post.

 

[Sled Dog]

This has to be the most ignorant post I have ever read.





This person has absolutely ZERO knowledge about anything related to the world market, anything political or that the world isn't flat..... utterly amazing!

Check the link D... A. .

Then post.

 

[RGardner]

Basically every penny that Big Oil has invested has been deducted to get to the bottom line that is shown on their financial statements. HBarlow, I have the feeling that you have never had any dealings with and oil company or you work for one and feel like you have to defend them. Before you go and call me a lib (what ever that is) I believe in the American way, that people and companies should be able to make a profit at what they do. But you should have to deal with these companies, they will run over you if they get the chance. How would you feel if me and some of my buddies got together and purchased all the municipal water companies and decided to set a price for water that you could just barely afford? We are not to far off that example.