Thursday, April 28, 2011

QI: Exxon Paid Almost $1M per Hour in Income Taxes and Its Effective Tax Rate Was 42.3%

ExxonMobil reported its first quarter 2011 earnings today, which came in at $10.65 billion, an increase of 69% from the same quarter last year when it earned $6.3 billion.  While the huge earnings amount captured all of the media attention, several other items received much less attention (see chart above):

1. ExxonMobil paid $8 billion in income taxes to various governments in the first quarter, which is about $22 million in income taxes each day, or almost $1 million each hour.  

2. ExxonMobil spent $7.8 billion in the first quarter on capital equipment and exploration (73% of its after-tax earnings), or more than $21 million per day, which is an increase of 14% compared to the first quarter last year.  Over the next five years, the oil company plans to invest about $175 billion in capital equipment and exploration - that's equivalent to almost the entire GDP of the Philippines in 2010.  

3. Compared to the first quarter last year, ExxonMobil increased its output of oil and natural gas by 10%, and a large part of that increased output came from a 192% increase in natural gas production in the United States, thanks to new advanced drilling technologies like hydraulic fracturing.  While higher oil prices certainly played a major role in increasing Exxon's profits, the role of increased output shouldn't be ignored.  And we shouldn't forget that retail natural gas prices in the United States, adjusted for inflation, are the lowest now since December 2002, in large part due to increased domestic production from companies like Exxon. 

4. Dwarfing Exxon's first quarter profits of $10.65 billion, are the total taxes paid or collected around the world by Exxon from January to March, which totaled to$26.2 billion and include:  a) $8 billion in income taxes, b) $10.3 billion in sales-based taxes, and c) $10.3 billion for all other taxes including property taxes, etc.

5. Exxon Mobil paid $8 billion in income taxes in the first quarter on $18.9 billion of income, which translates into a 42.3% effective income tax rate on its income.  And yet according to Obama and others, oil companies "aren't paying their fair share of taxes," and should be taxed more? 

6. The 6.1% average profit margin for Exxon's industry "Major Integrated Oil and Gas" ranks #112 among all industries for the most recent quarter (data here), so if Obama wants to target "excessive" corporate profits, there are many other industries much more profitable than the oil and gas industry.  For example, the surge in commodity prices has resulted in "windfall profit" margins of 31% for the silver industry, 23% for the copper industry and 19.8% for the gold industry.  Internet providers are capturing 23% in profit margins, cigarette companies more than 21% and periodical publishers are earning a whopping 51.6% profit margin, so perhaps those would be ripe targets for Obama's new lust to confiscate "windfall profits."  

79 Comments:

At 4/28/2011 9:52 PM, Blogger Ben Todd said...

AAPL net profit margin margin was 24% compared to XOM's 9%. Clearly AAPL is more evil than XOM.

 
At 4/28/2011 11:37 PM, Blogger Rufus II said...

I'm not interested in what Exxon (or Apple) paid to "Various Governments" around the world.

What did they pay Here?

 
At 4/29/2011 2:25 AM, Blogger PeakTrader said...

The U.S. needs to ramp-up domestic oil production substantially, including in Alaska and off the California coast.

If government gets out of the way, the U.S. will be able to collect more in taxes, more jobs will be created, oil prices will fall, etc., which are exactly what the country needs.

 
At 4/29/2011 2:44 AM, Blogger PeakTrader said...

And here's an appropriate article for Rufus II:

Exxon hits back at gas price anger
April 28, 2011

Exxon said it has paid nearly $59 billion in U.S. taxes over the past five years, including $9.8 billion last year.

"We understand that it's simply too irresistible for many politicians in times of high oil prices and high earnings -- they feel they have to demonize our industry," said a statement from Exxon vice president Ken Cohen.

The statement argued Exxon is not to blame for the recent surge in gas prices...Exxon argued that most of its profit comes from overseas operations.

 
At 4/29/2011 4:42 AM, Blogger Nicolas Martin said...

Why would anyone think it a good idea for the US government to "collect more in taxes"? Doesn't it do harm enough already?

 
At 4/29/2011 7:10 AM, Blogger Frozen in the North said...

Sales taxes were never part of Exxon's revenue stream. That's just plain stupid comment!

IF the French government charges 35% sales taxes on gasoline does that mean that Exxon paid 35% tax. This is just too idiotic.

Also if Exxon had to pay mineral rights is that taxes too? Do you homework a little better its embarassing

 
At 4/29/2011 8:17 AM, Blogger Shannon Love said...

Frozen North -- Sales based taxes in the oil industry are not necessarily traditional sales taxes. In many jurisdictions, oil is taxed as it leaves the jurisdiction or it is pumped.

Even if it is a simple sales tax, the tax revenue to the state would not exist unless the producer created the product to be sold. So, Exxon is responsible for generating that tax revenue.

 
At 4/29/2011 8:35 AM, Blogger VangelV said...

I'm not interested in what Exxon (or Apple) paid to "Various Governments" around the world.

What did they pay Here?


Exactly what they had to. Given the fact that the states and federal government make far more money off each gallon of gasoline sold than Exxon does there is no there there.

 
At 4/29/2011 8:36 AM, Blogger morganovich said...

mark-

while i realize you were just focusing on income tax, i think doing so raidically understates the tax paid by XOM. they pay far more in other taxes. (nearly 3X as much as in income tax)

in 2010, XOM had 370bn in operating revenues.

they spent 197 buying crude oil.

this leaves 173 bn in revs net of oil costs.

they then paid:

28.5bn in sales based taxes
36.1bn in other taxes and duties

(this is 37% of revs net of acq)

add in their other costs and you wind up with 52.9bn in pretax earnings.

they then paid 21.6bn in income taxes. (41% tax rate)

when you add up all the taxes, they paid 86.1bn in taxes on 173 bn in post oil acquisition cost revenues. (50% of revenues, 73% of profits)

i have not seen another company in the world, much less the US that pays more tax than XOM.

 
At 4/29/2011 8:36 AM, Blogger VangelV said...

Why would anyone think it a good idea for the US government to "collect more in taxes"? Doesn't it do harm enough already?

Obviously some people are not thinking clearly. Blame it on the modern education offered in the public schools and universities.

 
At 4/29/2011 8:49 AM, Blogger Frozen in the North said...

Sharon Love

Sales tax are a direct pass trough to the customer. it is not a tax on the activities of the firm (or its profit) Exxon could have lost billion and still have to pay sales taxes... Exxon only acted as tax collector for the government.

Mineral rights are the revenue paid to the owner of the ressources. Use of land never (Ever) includes mineral rights. These are considered owned by the nation, since they cannot be replenished, and again have nothing to do withe he profitability of the firm. Its a revenues sharing agreement between the extractor and the owner of the mineral resources.

BTW Exxon didn't "manufacture" the oil, they "found" it already made. The same holds for all minerals resources. To say that Exxon pays "huge" amounts of taxes based on this argument is spurious.

 
At 4/29/2011 8:49 AM, Blogger morganovich said...

"Sales taxes were never part of Exxon's revenue stream. That's just plain stupid comment!"

actually, yes they were. it is you who is making the stupid comment.

the reason sales taxes paid are broken out in the income statement as an operating cost is that they are also included in the revenue number.

your knowledge of GAAP accounting appears to be inadequate and you are making foolish claims as a result.

if you are going to ignore sales tax, then you also have to reduce revenue by a comparable amount.

however, this is a poor way to look at it if you are considering prices paid by consumers. taxation is = 73% of pretax profits.

their net margin is not even 1/2 of that of a company like apple or 1/3 that of Microsoft.

the point here is that if you want to blame someone for high gas prices, XOM is not the one doing it. they are not profit gouging, they are being taxed to death. they are also 3% of oil output over half of which they buy. they do not set the price.

pretending they do is just political grandstanding by the some guy who tells us that the greed of health insurers with their 1-3% net margins are the reason health care costs so much.

vilifying private companies to cover up for messes made by government appears to be the only thing this white house is good at.

 
At 4/29/2011 9:17 AM, Blogger juandos said...

Now this is embarrassing: "Also if Exxon had to pay mineral rights is that taxes too? Do you homework a little better its embarassing"...

Maybe you've of something called oil and gas leases possibly...

 
At 4/29/2011 9:20 AM, Blogger pluckerdude said...

The easiest thing to say and complain about is excessive profits by oil companies. The ignorance of the media, politicians, and the general public is astounding. This article does a good job of explaining how the money actually is distributed. Anyhow, just what in the hell is wrong with profits? Most of these idiots don't know that some of there retirement is invested in oil company profits.

 
At 4/29/2011 9:33 AM, Blogger Frozen in the North said...

morgan...

Sales taxes are still not a tax on Exxon's activity (profits or not it pays the taxes), it has no control over the amount. Sales taxes are a tax on consumption not on production. Included in revenues are not!

Fundamentally, we disagree as to the ownership of mineral rights. Your view is that the miners owns this free and clear (because they found it, spent the capital to "release" the value of this mineral). Another view (mine) is that mineral rights remain with the nation, and as the owners of this asset it is entitled to economic rent.

However, to say that 20% sales taxes (collected by the oil Cos), and 30% extraction taxes are the same as income tax is incorrect. Included in American GAAP or not.

BTW, maybe under US GAAP sales taxes are included but that's not the case everywhere.

 
At 4/29/2011 9:58 AM, Blogger juandos said...

"Another view (mine) is that mineral rights remain with the nation, and as the owners of this asset it is entitled to economic rent"...

Hmmm, what part of the Constitution gives the federal government ANY land ownership?

 
At 4/29/2011 10:22 AM, Blogger Rufus II said...

{PT, I'm not interested in what Exxon paid in Import duties, sales taxes, etc.

I'm interested in what Exxon Paid in U.S. Income Taxes.

Hint: If it's more than 10% they're above the industry average.

 
At 4/29/2011 10:33 AM, Blogger juandos said...

"I'm not interested in what Exxon paid in Import duties, sales taxes, etc"...

Well rufus, why aren't you interested in what the federal government extorts from the oil companies when it comes to leasing lands the federal government really doesn't own?

I mean money is money, right?

 
At 4/29/2011 10:36 AM, Blogger Bobby Caygeon said...

"Fundamentally, we disagree as to the ownership of mineral rights. Your view is that the miners owns this free and clear (because they found it, spent the capital to "release" the value of this mineral). Another view (mine) is that mineral rights remain with the nation, and as the owners of this asset it is entitled to economic rent."

Congrats, most idiotic comment I have ever read on this board. And it takes quite a bit to pass Walt G.

 
At 4/29/2011 11:11 AM, Blogger Ron H. said...

Frozen

"Sales taxes are still not a tax on Exxon's activity (profits or not it pays the taxes), it has no control over the amount. Sales taxes are a tax on consumption not on production. Included in revenues are not!"

You continue to ignore the helpful corrections to your faulty understanding that people are trying to give you, so that you can stop embarrassing yourself.

Consider this:

XOM no longer owns any stations, so it has no retail outlets. All products are sold at a wholesale level, so no "sales taxes" on retail sales are generated.

Assuming you understand the "customer" as the end user of the product, then you have correctly described a sales tax.

Now, your task is to explain what "sales taxes" means in your comments, as Exxon has no retail customers, and therefore no end users, and no final point of sale at which "sales taxes" are assessed.

Please restate your argument so it says what you really mean it to say, without the erroneous references to "sales tax".

 
At 4/29/2011 11:16 AM, Blogger Ron H. said...

"Anyhow, just what in the hell is wrong with profits? Most of these idiots don't know that some of there retirement is invested in oil company profits."

Good point. Those of us who are part owners of the company should cheer XOM's high earnings and profits, as they are OUR earnings and profits.

 
At 4/29/2011 11:25 AM, Blogger morganovich said...

"Sales taxes are still not a tax on Exxon's activity "

um, yes, they are. you pay a sales tax when you sell things, the activity exxon is in.

that price may be passed on in whole or in part to consumers, but it's still a tax and it affects XOM's business. without it, the price of gasoline would be lower and demand higher. that's a very real business impact.

sales taxes are not a tax on consumption, they are a tax on sales. sales for a co like xom = production. you are splitting a bunch of nonexistent hairs.

i also think you draw the wrong conclusion. sales taxes are much nastier than income taxes. you pay them even if it makes you lose money. they come off the top, not the bottom. they are tougher than income tax (of which xom already pays among the highest rates in the S+P 500)

your communist ideas about resources are as confused as they are wrongheaded.

if a state owns the land and want to charge leases to use it (which are another expense apart from XOM taxes that is paid to the state), fine.

nearly all oil exploration is done through leases.

you are jousting at a straw man.

that said, if i own land, then it's contents are mine. why should i share gold i find in my back yard with you?

you seem opposed to the concept of private ownership. look how well that has worked out for states like venezeula...

 
At 4/29/2011 11:25 AM, Blogger Ron H. said...

Rufus

"I'm interested in what Exxon Paid in U.S. Income Taxes.

Hint: If it's more than 10% they're above the industry average.
"

Why the fixation on income taxes? Apparently that exact number isn't easy to come by, as no one has answered your question.

If you knew the amount, what point would you make? That Exxon should pay less, more, or what?

Can you make the point knowing only that Exxon pays enormous amounts in taxes?

You understand, don't you, that income taxes, as well as all other taxes, are ultimately paid by the end user, right?

 
At 4/29/2011 11:36 AM, Blogger VangelV said...

Sales tax are a direct pass trough to the customer. it is not a tax on the activities of the firm (or its profit) Exxon could have lost billion and still have to pay sales taxes... Exxon only acted as tax collector for the government.

The point is still the same. The government taxes the product that Exxon produces even though it had nothing to do with that production and Exxon as a company as well as its employees and shareholders have paid taxes all along the way.

Mineral rights are the revenue paid to the owner of the ressources.

Why is the government the 'owner' of private resources? What did it do to obtain those rights?

Use of land never (Ever) includes mineral rights. These are considered owned by the nation, since they cannot be replenished, and again have nothing to do withe he profitability of the firm.

What "nation?" There is no such thing as the "nation" owing anything. What matters is control and that is in the hands of parasitic bureaucrats who do not contribute anything in demand by consumers and taxpayers.

Its a revenues sharing agreement between the extractor and the owner of the mineral resources.

It is extortion where the parasite class takes its cut from the productive.

BTW Exxon didn't "manufacture" the oil, they "found" it already made. The same holds for all minerals resources. To say that Exxon pays "huge" amounts of taxes based on this argument is spurious.

Really? You mean that way that you and I find oil that is already made? Do you have any idea of what it takes to bring a gallon of gas to a consumer? You have to have someone identify targets to be drilled. You need exploratory wells to evaluate the formation. You need to find source rock. You have to identify the reservoir rock to determine the porosity and permeability. If everything works out you drill evaluation wells to figure out how much oil you can get out of the formation. Then you build infrastructure to take the oil to a port and drill the wells to produce the oil. You rent very large crude carriers and load the oil. You take that oil to another port and transport it to a refinery. At the refinery you make the final product which you have to transport again to the consumers. Each step is taxed. And after all is said and done you sell gasoline for less than the equivalent amount of Starbucks coffee or Evian mineral water, neither of which is taxed heavily or particularly difficult to produce.

I suggest that you take a look at the reality rather than the Marxist version that you seem to be stuck in.

 
At 4/29/2011 11:53 AM, Blogger Buddy R Pacifico said...

"Now, your task is to explain what "sales taxes" means in your comments, as Exxon has no retail customers, and therefore no end users, and no final point of sale at which "sales taxes" are assessed."

This may be semantics in that sales tax in the U.S. is different than in Canada. Canada has a Value Added Tax (VAT) or national sales tax. The retail U.S. type sales tax is different than the VAT, because each step of production is taxed in the case of a VAT. Thus, the accounting is probably different.

 
At 4/29/2011 12:24 PM, Blogger Rufus II said...

The fact is, Exxon, and the rest, allocate their Profits to their Overseas Subsidiaries, pay their Income Taxes "Over There," Invest their money "Over There," pay Dividends to Warren Buffet, who pays 15%, all the while benefitting from the Military Adventures I Pay For, and the Great Universities I Pay For, The Roads I Pay For, and use a portion to Bribe the Stinking Congressmen I Pay For (but, obviously, I don't pay enough for.)

It, quite frankly, chaps my ass when Exxon, and Warren Buffet pay a lower effective rate than I do.

 
At 4/29/2011 12:51 PM, Blogger morganovich said...

rufus-

your argument would makes sense if it were lowering XOM's income tax rate, but it's not. they pay MORE because they do that. their income tax is 6 points above the maximum us rate.

they would love to repatriate their earnings and be taxed 100% in the US, but they can't. that's the law.

you seem to be arguing that they are deliberately shifting their taxes to higher tax jurisdictions.

why would they do that of they had any choice?

 
At 4/29/2011 12:56 PM, Blogger morganovich said...

"It, quite frankly, chaps my ass when Exxon, and Warren Buffet pay a lower effective rate than I do"

i doubt your effective tax rate is 73% on an all in basis or even 42% on income.

to pay a 42% effective rate, on income, you'd need to be making millions and living in a very high income tax state and have no deductions at all.

the effective tax rate for $500k in income in the US is about 28-29%.

there is NO state that could get you to 42% from there.

on a million you'd pay about 31.5%. even in California you would not get to 42% effective even with ZERO write offs.

sorry rufus, but you are just flat out lying about XOM having a lower effective tax rate than you do.

 
At 4/29/2011 1:11 PM, Blogger juandos said...

From the Exxon/Mobil blog: Gas prices and industry earnings: A few things to think about the next time you fill up

 
At 4/29/2011 1:13 PM, Blogger juandos said...

Well dang! Blogger snagger won't allow something through from the Exxon/Mobil blog site...

 
At 4/29/2011 1:14 PM, Blogger Rufus II said...

Morgan, I don't believe all those numbers for a minute. In fact, can you tell me the last Income Tax PAYMENT Exxon made to the U.S. Treasury?

 
At 4/29/2011 1:26 PM, Blogger morganovich said...

rufus-

1. that's the same stupid question you ask over and over. i do not get copies of XOM's checks. can you prove they DON'T pay income tax? you make this claim over and over, but it's still an unsubstantiated lie.

2. so what? they mostly do business overseas. they are paying a HIGHER income tax rate as a result.

you make it sound like they are avoiding taxes by being overseas. they aren't. they are paying MORE.

don't you think they'd LOVE to get out from under that if they could?

3. XOM pays more US taxes that all but a tiny handful of companies, including a number of taxes specifically levied on oil companies and no one else.

given that they pay 73% of revenues net of oil purchases as taxes, can you possibly think they are undertaxed?

what is it you think needs to be done here?

 
At 4/29/2011 1:33 PM, Blogger Rufus II said...

First off, they are depicting Royalties, etc. as "taxes."

Their big dodge (along with half of the S&P 500) is taking their Profits in a low-tax country, then leaving the money "offshore," thus avoiding paying U.S. Income taxes.

Taxes should be Collected when the Profit is earned, Onshore, or Offshore.

 
At 4/29/2011 1:34 PM, Blogger juandos said...

"In fact, can you tell me the last Income Tax PAYMENT Exxon made to the U.S. Treasury?"...

http://tiny.cc/1u1zt

Let me state it unequivocally. Last year, our total taxes and duties to the U.S. government were $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period.

And during the first quarter of this year, we incurred tax expenses in the United States of more than $3.1 billion on U.S. earnings of $2.6 billion.

 
At 4/29/2011 1:37 PM, Blogger morganovich said...

you are the one making the claim, so substantiate it.

XOM paid 21.6bn in income taxes last year.

why don't you show us how NONE of that went to the US?

a quote from some blogger or wingnut journalist doesn't count.

 
At 4/29/2011 1:44 PM, Blogger Rufus II said...

Exxon is giving you all those Other numbers; why isn't Exxon giving you the amount of U.S. Income Taxes it pays?

It pays some African, or other exporting nation a large royalty (price) for the oil, and claims it as "Taxes," but they never come out and say, "We paid the U.S. Treasury X amount in Income Taxes." Why?

 
At 4/29/2011 1:45 PM, Blogger morganovich said...

rufus-

Their big dodge (along with half of the S&P 500) is taking their Profits in a low-tax country, then leaving the money "offshore," thus avoiding paying U.S. Income taxes

no. this is just flat out, provably wrong.

how do you wind up paying a 41% income tax rate (6 points above the US maximum) by taking profits in low tax countries?

wouldn't taking profits in low tax countries LOWER your tax rate? they are paying HIGHER taxes by being offshore.

read the 10k.

you are just making up facts.

they would LOVE to pay income taxes in the US. the fact is that the CAN'T. such rules are imposed upon them by countries that have the oil. they force them to create a local subsidiary so that they can tax them.

you are completely off base on this.

sure, guys like google offshore to tax shop, but so what? i moved from california to utah in part because of the taxes. i am not some milchcow for California any more than google is a milchcow for the US.

any sane business looks to locate where costs are low.

businesses are not run for the benefit of government.

 
At 4/29/2011 1:51 PM, Blogger Rufus II said...

If they're paying 41% somewhere it's because that particular country that they're exporting from isn't allowing itself to be played for a sucker as we are.

We're suckers.

Now, this sucker has to go give Exxon, or one of their cohorts, some money. Chou.

 
At 4/29/2011 1:54 PM, Blogger morganovich said...

"but they never come out and say, "We paid the U.S. Treasury X amount in Income Taxes." Why?"

1. yes they do. read what peak posted.

2. nobody does that in their filings. it's just not a portion of the common data shared. they don't tell you what they spent on paperclips either or to whom they made rent payments for office space. so what?

you are making fallacious logical arguments.

do they not pay american airlines because they don't tell you in the k how much they spent.

you are getting pretty desperate rufus.

 
At 4/29/2011 2:11 PM, Blogger morganovich said...

"we're suckers"

that's just stupid. we tax the biz they do here. that's how the world works.

if you run a business in france, you pay french taxes.

what is it you are claiming we should do? tax them on global earnings and make them pay 75% in income tax?

 
At 4/29/2011 2:15 PM, Blogger morganovich said...

BTW rufus, far from being suckers, the US in fact, has one of the most all encompassing global tax codes in the world.

name 4 other countries that tax all global income?

and again, you act like XOM is a ward of the state.

they are a private company. they don't exist to pay tax dollars like some cow to be milked.

you act like they owe you something.

why would that be?

if they operate in nigeria, they are not using us roads, police, or even courts. what is it you think they should be paying for?

 
At 4/29/2011 2:52 PM, Blogger Ron H. said...

Buddy

"This may be semantics in that sales tax in the U.S. is different than in Canada. Canada has a Value Added Tax (VAT) or national sales tax. The retail U.S. type sales tax is different than the VAT, because each step of production is taxed in the case of a VAT. Thus, the accounting is probably different."

You are correct, this may just be a matter of semantics. If that's the case, however, Frozen should understand that ALL taxes, in fact all costs of producing a finished product are passed on to the end user.

 
At 4/29/2011 2:59 PM, Blogger juandos said...

rufus are you related to pseudo benny?

"Exxon is giving you all those Other numbers; why isn't Exxon giving you the amount of U.S. Income Taxes it pays"...

rufus either you're refusing to follow the link to the Exxon/Mobil blog and read what they have to say about what Exxon/Mobil paid in INCOME TAXES (I'm making no claims on it being factual) or you've realized that you've basically tripped over your own words...

If you don't like what Exxon/Mobil has to say then how come you don't do some homework and find out what the company paid in taxes?

Can't you locate something online?

Something like this from CNNMoney: Exxon doled out more than $15 billion in income tax payments to foreign countries last year. U.S. tax codes allow companies to take massive deductions in light of those international charges, which knocked Exxon's federal income-tax bill down into negative territory.

That said, Uncle Sam gets his money in other ways. Including sales taxes and duties, Exxon recorded $7.7 billion in U.S. tax costs last year, and paid even more overseas.

Its grand total in global taxes for the year? A whopping $78.6 billion. The company's effective income tax rate was a hefty 47%, its highest in three years
...

 
At 4/29/2011 3:03 PM, Blogger PeakTrader said...

This comment has been removed by the author.

 
At 4/29/2011 3:05 PM, Blogger PeakTrader said...

Nicolas says: "Why would anyone think it a good idea for the US government to "collect more in taxes"? Doesn't it do harm enough already?"

The U.S. government is collecting too little in taxes, because there aren't enough Americans working, not because tax rates are too low.

Similarly, if U.S. oil firms produce more domestic oil, they'll pay more taxes.

The government does harm by standing in the way of employment and domestic oil production.

 
At 4/29/2011 3:09 PM, Blogger juandos said...

Now Blogger snagger has a problem with CNNMoney?!?!

 
At 4/29/2011 3:11 PM, Blogger Ron H. said...

"Now Blogger snagger has a problem with CNNMoney?!?!"

Maybe Blogger snagger has a problem with 'juandos'. :-)

 
At 4/29/2011 3:13 PM, Blogger Buddy R Pacifico said...

Ron H,

"You are correct, this may just be a matter of semantics. If that's the case, however, Frozen should understand that ALL taxes, in fact all costs of producing a finished product are passed on to the end user."

Sales taxes ultimately must be deducted from revenue, no matter what accounting (private) method. The more tax applied the more cost to the consumer -- it's inescapable.

BTW, I am for a U.S. VAT, BUT with reductions in income and corporate tax rates.

 
At 4/29/2011 3:17 PM, Blogger juandos said...

"Maybe Blogger snagger has a problem with 'juandos'. :-)"...

You know Ron H you just might have a point there amigo...

After all Google honchos have supported and still support Obama...

 
At 4/29/2011 3:28 PM, Blogger PeakTrader said...

Also, I may add, it seems even the "Great Roubini" doesn't understand the fundamental difference between taxes and tax rates:

Nouriel Roubini On The One Big Reason To Be OPTIMISTIC About The National Debt
Apr. 20, 2011

"The United States has the most manageable fiscal issues of any major advanced economy because federal, state and local revenues as a share of GDP are very low, for cyclical and other reasons. Therefore, fiscal balance can be restored by fiscal adjustment without major economic difficulty in the near term."

"In other words, US revenue and spending can be brought closer into line via raising more revenue (as a share of GDP) and so in reality this means raising taxes."

My comment: Raising tax rates may cause a double-dip and decrease tax revenue. However, expanding the economy with current or lower tax rates will increase tax revenue.

 
At 4/29/2011 3:46 PM, Blogger VangelV said...

what is it you are claiming we should do? tax them on global earnings and make them pay 75% in income tax?

No. I think that what he is saying is that you have to make it difficult for a company to be headquartered in the US. Exxon needs to go abroad.

 
At 4/29/2011 4:05 PM, Blogger Ron H. said...

Buddy

"BTW, I am for a U.S. VAT, BUT with reductions in income and corporate tax rates."

How about a straight consumption tax at the final point of sale?

I would only favor a VAT if it replaced all other taxes completely.

In my opinion, a VAT shares one of the problems of corporate taxes; and that is transparency. It's hard to tell how much you pay for a product or service is actually imbedded taxes, as in the recent post on taxes paid by Exxon. A VAT multiplies this problem by taxing at every step of production.

A consumption tax, on the other hand, is right there in plain view each time you buy something, and you would pay no other taxes of any kind.

If nothing else, I believe corporate taxes should be entirely eliminated, as they are ultimately paid by consumers, stockholders, or employees, but they aren't visible.

 
At 4/29/2011 4:15 PM, Blogger Ron H. said...

"After all Google honchos have supported and still support Obama..."

Yeah, and even a cursory scan of your writings might suggest that you aren't an Obama fan. :) Perhaps this is censorship.

This, from your link:

"The president and the business leaders will discuss our shared goal of promoting American innovation, and discuss his commitment to new investments in research and development, education and clean energy," a White House official said."

This just can't turn out well for us.

 
At 4/29/2011 4:22 PM, Blogger Ron H. said...

""The United States has the most manageable fiscal issues of any major advanced economy because federal, state and local revenues as a share of GDP are very low, for cyclical and other reasons."

What does this even mean? That of all the major economies circling the drain like turds in a toilet, the US is furthest from the bottom?

 
At 4/29/2011 4:44 PM, Blogger Rufus II said...

The disingenuousness of This

Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period.

is what hacks me off.

That $59 B includes all sorts of business "expenses," and sales taxes. You try telling the IRS that you're special because you paid a lot of sales/payroll taxes, etc. Let us know how long it took for the laughter to die down.

No, I Don't want Exxon to pay "75%." I just want them, Along with Apple, Microsoft, GE, and all the rest, to pay their fair share.

And, I don't want their ultra-rich shareholders to pay 15% while ordinary people are working their backs off, and paying over twice that.

 
At 4/29/2011 5:38 PM, Blogger PeakTrader said...

Ron, it's code for saying something that you can say later you didn't say.

It reflects that federal tax receipts as a percentage of GDP is at the lowest level since 1949 (a little over 15% of GDP).

 
At 4/29/2011 6:00 PM, Blogger Ron H. said...

Rufus

"You try telling the IRS that you're special because you paid a lot of sales/payroll taxes, etc. Let us know how long it took for the laughter to die down."

Don't you consider taxes in any form a legitimate deductible expense? If you were a corporation you could claim the same expenses. You can already deduct some taxes you pay from taxable income. Your ignorance on this subject continues to hurt you.

"No, I Don't want Exxon to pay "75%." I just want them, Along with Apple, Microsoft, GE, and all the rest, to pay their fair share."

And, their "fair share" is...what?

How about the rich? should they also pay their "fair share"?

You understand, don't you, that any taxes paid by corporations are included in the price you pay for their product or service. So you will ultimately pay any tax increase you call for.

"And, I don't want their ultra-rich shareholders to pay 15% while ordinary people are working their backs off, and paying over twice that."

This is pure BS. How many "ordinary people" do you know who pay an effective tax rate of 30%? I'll but there's not one.

What's yours? Around 15% at most, right? Please don't confuse 'marginal' with 'effective'.

It appears you haven't really paid much attention to the great information others have given you, but just want to continue pulling nonsense out of your ass, and whining about it.

 
At 4/29/2011 6:21 PM, Blogger VangelV said...

BTW, I am for a U.S. VAT, BUT with reductions in income and corporate tax rates.

Bad idea. You will find that the new taxes were implemented but the tax cuts somehow failed to take place.

 
At 4/29/2011 7:08 PM, Blogger Rufus II said...

but just want to continue pulling nonsense out of your ass, and whining about it.

Very nice, Ron; you continue to impress.

As for taxes: My self-employment taxes, alone, brought me 75% of the way to Buffet's effective rate.

 
At 4/29/2011 7:41 PM, Blogger Buddy R Pacifico said...

VangeIV states:

"Bad idea. You will find that the new taxes were implemented but the tax cuts somehow failed to take place."

VangeIV's comrads in the People's Republic of China pay a VAT. Most countries that are major global traders have a VAT. This is to make their goods and services compeitive and in sync with border tax adjustments.

 
At 4/29/2011 8:16 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

"Fair share" is a euphemism for "more." And after every tax is paid (regardless of percent or amount), the hated rich and evil-businesses STILL owe their "fair share," which is, of course, more. ALWAYS more than whatever is actually paid.

My head hurts.

 
At 4/29/2011 8:24 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

One thing I think would help is for a calculation to be made as to what percent of a gallon of gasoline goes to expenses, taxes, after tax profit and retail state/local sales/excise taxes.

Of course, it's impossible to accurately calculate that, because of all the factors and different localities, but a general breakdown from a reputable source would indeed be illuminating to the general profit. Even just to have the oil company profit per gallon vs. total taxes per gallon.

My back of the envelope calculation is that the pretax profit for the oil company might be as much as a quarter a gallon. In CA, our retail state/federal taxes alone are currently about 66 cents a gallon -- highest in the nation. If anyone has a better URL to offer a more educated breakdown of this fuel cost, please post it here -- or send it to me at RRider@san.rr.com.

 
At 4/29/2011 8:26 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

That "general profit" is SUPPOSED to be "general PUBLIC."

 
At 4/30/2011 1:05 AM, Blogger Ron H. said...

Rufus

"As for taxes: My self-employment taxes, alone, brought me 75% of the way to Buffet's effective rate."

So your effective income tax rate is 12%? Where are the people paying 30%?

You haven't explained what a "fair share of taxes is for XOM, AAPL, MSFT, etc.

 
At 4/30/2011 1:12 AM, Blogger Ron H. said...

Buddy

"This is to make their goods and services compeitive and in sync with border tax adjustments."

This is to hide the true level of taxes in a separate layer of accounting at each stage of production, so that it's extremely difficult to tell what effective tax rate you are paying.

A similar ruse is the requirement that your employer pay 1/2 of your Social Security "contributions" for you, so you don't feel the full impact.

 
At 4/30/2011 1:18 AM, Blogger Ron H. said...

""Fair share" is a euphemism for "more."

That's exactly right. No one clamors for the rich, and the evil corps. to pay less taxes.

 
At 4/30/2011 7:31 AM, Blogger VangelV said...

No, I Don't want Exxon to pay "75%." I just want them, Along with Apple, Microsoft, GE, and all the rest, to pay their fair share.

Me too. I would say that the, "tax expense of almost $59 billion", should be much lower. Obviously you think that it should be higher. Who determines what is 'fair?' And given the changes in the way that people can purchase stocks, why should Exxon remain headquartered in the US and pay much more in taxes than it should?

 
At 4/30/2011 7:34 AM, Blogger VangelV said...

What's yours? Around 15% at most, right? Please don't confuse 'marginal' with 'effective'.

It appears you haven't really paid much attention to the great information others have given you, but just want to continue pulling nonsense out of your ass, and whining about it.


This may be a Bennie situation. Our friend can't be as stupid as he seems. He is probably putting you on by offering cliche arguments given by many of the Marxists in academia.

 
At 4/30/2011 7:43 AM, Blogger VangelV said...

Of course, it's impossible to accurately calculate that, because of all the factors and different localities, but a general breakdown from a reputable source would indeed be illuminating to the general profit. Even just to have the oil company profit per gallon vs. total taxes per gallon.

As the Exxon people pointed out, they don't own most of the stations. All they tell you is that for each gallon of gasoline their after tax profit is 2 cents.

 
At 4/30/2011 10:30 AM, Blogger morganovich said...

payroll taxes are included in the G+A line rufus and are additional to the ones you are pointing to.

once more, you make outlandish claims based on ignorance and without any factual support.

do you have any evidence at all for any of your claims?

you seem to believe (like a good marxist) that repetition makes things true.

that's the dogma of propagandists, not thinkers.

 
At 4/30/2011 12:02 PM, Blogger juandos said...

"No, I Don't want Exxon to pay "75%." I just want them, Along with Apple, Microsoft, GE, and all the rest, to pay their fair share"...

Well rufus why should their 'fair share' be one more penny extorted from the oil companies than is extorted from you or someone who makes $20K per year?

Is it the job of the productive (as indicated by their monetary rewards) to prop up the parasitic in this country?

 
At 4/30/2011 12:29 PM, Blogger Buddy R Pacifico said...

Ron H,

As a small employer (7 employees), I know well of the employer portion of FICA and Medicare.

I think we agree on a national sales and this is a form of VAT like Canada has. The tax paid at the wholesale and retail level needs to be clearly noted on invoices, statements and receipts. Taxes should not be hidden but instead highlighted in large print. I am going to start doing this on paycheck statements!

Not endorsing a VAT for the U.S., is another advantage for the cabal of crony communists and capitalists in the economies of our trading "partners".

 
At 4/30/2011 7:02 PM, Blogger blehr said...

If the argument that corporate taxes paid to the U.,S govt.be a fair indicator of the value of their goods and services, that makes GE a totally worthless company.Who the hell does Inmelt think he is?

 
At 4/30/2011 7:19 PM, Blogger Ron H. said...

"This may be a Bennie situation. Our friend can't be as stupid as he seems. He is probably putting you on by offering cliche arguments given by many of the Marxists in academia."

You may be right. It IS hard to believe anyone could continue to spout such nonsense, but admitting you are wrong can be hard also. Politicians are really good at continuing this kind of drivel.

By the way, I don't think Exxon owns any stations anymore.

I believe Bennie now prefers to be called Bunny. morganovich addressed him this way, and I assumed it was by request, so I've been calling him bunny also. I think it's what his boyfriend in the White House calls him.

 
At 4/30/2011 7:27 PM, Blogger Ron H. said...

Buddy

"I think we agree on a national sales and this is a form of VAT like Canada has. The tax paid at the wholesale and retail level needs to be clearly noted on invoices, statements and receipts.

I prefer a national sales tax that would replace ALL OTHER federal taxes, including business, VAT, income, inheritance, gains, excise, etc.

The problems I see with any other method, is that it's so easy to just add a tax without actually eliminating others.

Check out the "Fair Tax" site. Interesting ideas.

 
At 5/01/2011 9:58 AM, Blogger Angela said...

Rufus the Doofus said: "The disingenuousness of This (sic).'
Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period.' is what hacks me off That $59 B includes all sorts of business "expenses," and sales taxes. "

Uh, no. I think you're confusing taxable income with tax expense. And what's really telling is that nobody even bothered to point that out to you, because you're just so wrong about every other "point" you've brought up, and there's only so much posting people can do in a day.

 
At 5/01/2011 12:17 PM, Blogger Ron H. said...

"...and there's only so much posting people can do in a day."

And here it is, a brand new day!

Lots of new opportunities to heap abuse on Rufus if he asks for more. :)

 
At 11/04/2011 2:28 PM, Blogger kingfish15 said...

Wow-No wonder we have these dumb protestors that don't even know what they are protesting. The largest problem the US has right now is not the economy, it is not low taxes, is is not unemployment, it is stupid ignorant people.

They keep it up and we will see our large corporations and very high income people(ie. major tax contributors) just leave the US.

Even the dumbest out there should be able to figure out what happens after that. 50% plus unemployment,
an economy going down daily,a bankrupt government(along with millions of people), and ALL the people who had been living off the government with no income of any kind. Well, with the large percentage of "give me dummies" dying off first because they have nothing without their handouts, we will once again emerge as a strong company. UNLESS, and that is a big UNLESS---another country steps in and takes advantage of the situation and takes over completely. It will be easy for one of them to do it. Yup, bye bye miss american pie, walked to the gas station but the station was dry, singing this will be the day that I die......Major powers could not kill us off, but we managed to do it to ourselves.

 
At 11/07/2011 3:41 PM, Blogger VangelV said...

Wow-No wonder we have these dumb protestors that don't even know what they are protesting. The largest problem the US has right now is not the economy, it is not low taxes, is is not unemployment, it is stupid ignorant people.

Do you expect anything but ignorance given the involvement of the state in education?

They keep it up and we will see our large corporations and very high income people(ie. major tax contributors) just leave the US.

Actually, it can get a lot worse. They can stay and make active bets on a major economic contraction in the US. They can get a lot richer while the middle class gets wiped out.

 

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