Thursday, May 01, 2008

Exxon Paid Almost $3 in Taxes for Every $1 Profit

Actually, income taxes of $9.3B are only about 1/3 of Exxon's total tax liability of $29.3B for the first quarter of 2008, according to this press release (see top chart above). Further, Exxon paid close to $3 in taxes ($2.69) for each $1 it earned in profits.


At 5/01/2008 7:34 PM, Anonymous Anonymous said...

I am confused. Please explain how. You're obviously not an idiot, but it makes no sense. Tax breaks? How do they do it?

At 5/01/2008 8:00 PM, Blogger OBloodyHell said...

Anonymous, it's quite clear you're confused. Thanks for sharing, because now I am, too, at least about what the heck you're talking about...

"How do they do... WHAT"?


Regarding the post itself, I'd say it's nothing new -- the States were whining about the "cost to society" of tobacco smokeers, as well as the questionably ethical issues of a business "selling somthing harmful" all the while they gouged the hell out of smokers for taxes adding up to far more than the profits the tobacco corps were making... and when they ripped off the smokers again by blackmailing the tobocco corps into a payoff (which, of course, got passed onto the consumers), they didn't put the money towards anything obviously tied to smoking, like health insurance subsidies, price rebates or subsidies on "the patch" (which, I'm told, is about 3x as expensive as the already very costly cigarette habit it replaces), and paying tobacco-related medical expenses of smokers and former smokers -- no, they didn't do anything -- you know -- morally right with the money.

No, the States just took it, pocketed it, and went on a spending spree.

So it's no surprise that they are so ethically bankrupt as to not say anything when they are gouging the hell out of the people who actually make something important but who get called "greedy" for making far less than the government does off the thing *they* actually make.

At 5/01/2008 8:12 PM, Anonymous Anonymous said...

Where did the money come from to pay the taxes? You and I!!!! If they didn’t pay the tax they would have an even a larger share of the wealth in this country. Boo hoo. They can't by another corporate jet.

At 5/01/2008 10:51 PM, Anonymous Anonymous said...

Nobody ever accused me of being brilliant. But I think it would be difficult to pay more in taxes that your profit.

Perhaps I'm wrong, it wouldn't be the first time, but even for an oil company that would seem to be a shady deal.

Live From Las Vegas
The Masked Millionaire\

How was the trip back from Russia?

At 5/02/2008 1:56 AM, Anonymous Anonymous said...

The taxes were collected by Exxon from it's customers and forwarded to the government.

At 5/02/2008 2:05 AM, Blogger Romeo Bravo said...

Hi Mark:

Love the blog! I'm a 1991 U of M Grad.

The other thing to note is that Exxon/Mobil paid more in income tax in 2006 than the bottom 50% of ALL US taxpayers. I don't have the exact reference but this is something that doesn't get mentioned much either.

These bottom 50% of taxpayers pay about 3% of total personal income taxes.


At 5/02/2008 3:00 AM, Blogger K T Cat said...

Don't you get it? Exxon is bad, Apple is good.

At 5/02/2008 7:46 AM, Anonymous Anonymous said...

Nice one, kt cat!

Unfortunately, Exxon is in a business that is politically incorrect. They are not green enough.

What is really funny is all the green window dressing as though one must be environmentally credentialled to run a business.

At 5/02/2008 9:24 AM, Anonymous Anonymous said...

The profits are after-tax profits, so they can pay those taxes... the sales tax is just collected from the consumer, but the point is still there. When politicians complain the oil companies dont "pay their fair share"... what ever that means... they forget to tell people the ridiculous amount of taxes they alreadd pay. And the bulk of those taxes just get carried over to the consumer because they now spend less on exploration because the return on investment is dimished, which icreases prices due to lower supply. Jup... those oil companies just dont pay enough taxes!

At 5/02/2008 10:22 AM, Blogger Marko said...

Another way to look at it is that they paid an effective tax rate of 75%. Hillary says she wants to take their profit and spend it on national priorities - "we are in it together" (code words for MARXISM), but it looks like they are already taking most of the profit, and spending it on who knows what nonsense.

At 5/02/2008 4:04 PM, Blogger JZ said...

This comment has been removed by the author.

At 5/02/2008 5:08 PM, Anonymous Anonymous said...

Jesse, please explain how increases in the revenue of Exxon since 2001 are due to the war in Iraq. Please, give some empirical data. You can't. Because, they are not. It's nonsense. Be against the war. That's fine. But, you come across as ignorant when you make ridiculous assertions.

At 5/02/2008 5:56 PM, Blogger JZ said...

This comment has been removed by the author.

At 5/02/2008 6:02 PM, Blogger JZ said...

This comment has been removed by the author.

At 5/02/2008 7:01 PM, Blogger OBloodyHell said...

Now, let's make a stab at why your "ridiculous assertion" is still a ridiculous assertion despite your arguments to the contrary -- I'm not saying the war has no effect, just that it's not as substantial as one might think. Events can cause spikes, but, for the most part, don't have a large overall effect. Further, the effect on prices in the USA is less than you suggest.

1) The number of men and women in Iraq is ca. 250k. I'm not going to look up Afghanistan (which I'll include because it's relevant even if you did not mention it), but I'll assume it's the same, even though I'm pretty sure it's less... so 500k men and women. Let's suppose their usage of oil and products averages 5x the rate of "the casual user" -- and that they do it using vehicles that average 1/20th the efficiency -- so that's a defacto multiplier of making them equivalent to 5 million people... You see where this is going to go?... 5million. Vs. 300 million Americans. plus 500 million Europeans. plus 1.1 BILLION Indians. plus 1.1 BILLION chinese... so, 5 million vs. THREE BILLION others. Does the phrase "a drop in the bucket" come to mind? Well, "a drop in the barrel" is more like it. The demands of the Iraq war has little to do with the current price.

2) "Lowered production" ... yes, the production is lower, even substantially -- but production tends to match demands, within limits, not the other way around. OPEC has tried to control production, and has certainly got an effect on it, but they just don't. There's too much to gain by cheating and producing more than they mandate. So any Iraqi shortfall almost certainly is mostly overbalanced by an increase somewhere else.

3) The primary reason why gas prices are so high has little to nothing to do with the war. There are two larger forces at work on the price of oil, which, excluding China and India's rising demand, would be, I've seen estimates (around here IIRC) at US$30/bbl. The India/China demand boosts that by $50 to an expected price of $80/bbl... but it's actually ca. $110/bbl last I heard -- which means that there is something else causing it to be up $30/bbl...

What? "I just told you!! It's the Iraq War!!!" shouts Jesse. "AAAAANNNKKKK!!!" goes the buzzer. "Wrong answer. Siddown!".

It's speculation. There are a lot of investment funds that are driving up the short-term price of oil by speculating on it. It's created a pricing bubble which should burst at some point before long, and which will actually drive the price down below that $80/bbl which is the actual balance where supply and demand meet.

THAT is, as far as I know, the opinion of the experts, or was the last I heard. I have no idea what the rapidly rising price of grains and related foods will have on this, if any.

Strangely, no one mentioned the Iraq War as a substantial driving force, though.

At 5/02/2008 7:07 PM, Blogger OBloodyHell said...

P.S., the reason why the effect would be lower than you suggest is that the Iraq oil, prior to the War, was all earmarked for Russia and China. While oil is fully fungible, so this matters little, It means it only matters if production elsewhere is not increased to make up for the shortfall AND if some of what was earmarked for the USA were diverted elsewhere, creating a shortage here.

Since both of those are "IF"s until you demonstrate otherwise (show how production in 2000, say, was more than today, and the missing amount is roughly attributable to the Iraqi shortfall in production), your conclusion is rather obviously doubtful.

At 5/02/2008 7:48 PM, Blogger JZ said...

This comment has been removed by the author.

At 5/03/2008 1:20 AM, Blogger OBloodyHell said...

> Nowhere did I say that the Iraq war is the primary reason for the rise in gas prices.

I quote:
First, note that Iraq's oil production has dropped significantly since before the war started.

Hence, I argue that world supply of oil is now less than it would be if there were no war in Iraq.

A distinction without a difference.

At 5/03/2008 1:58 AM, Blogger OBloodyHell said...

> you are comparing the increased oil demands to populations (?!), when we're talking additional quantities of oil.

I'm comparing the effect of a population's demand on the price of oil, which is, inherently obviously, ***the*** driving factor in the price of anything.

...Or were you somehow confused by the word "demand"?

Gravity doesn't "demand" you sit down. You just do.

The needs of any group of humans are the things which drive prices up or down. If I invent a cheap way to really derive power from water (using some magical catalyst system, say), in addition to becoming very, very rich, the "demand" for oil goes down precipitously, because now there is an alternative to satisfying the demand for energy. There is "competition" where currently there is none.

The uses to which they put it are the reasons why they have a "demand" for the product. This is one of the arguments (excessively simplistic, mind you) for saying that a US citizen places much more stress on the ecosystem than a bush native of, say, Borneo. Their demand is much higher -- so one US citizen would equate to 100 (or whatever) "Borneans" (?) in "demand".

Your attempt to claim that those of India and China place them in the above category "because they live simple lifestyles" is insipid, because they also live inefficient lifestyles, given their numbers, which makes their numbers more relevant than any minor difference in their actual use. As has been attributed (probably incorrectly) to Lenin and Stalin "Quantity has a quality all its own". When 1.1 billion people decide to do anything it's significant... and in this case, two such groups decided to do it.

So it is entirely proper to equate the populations of two groups, if allowances are made for the difference in demand between the two groups -- I attempted to provide a rational multiplier to equate the heavy demand of the army group, with their warmaking machinery (not designed for excessive efficiency) with that of the average population in the industrial societies (ignoring some not really insignificant ones like Malaysia, you note). In these terms, the difference in use between Europe/USA/Japan and India/China is insignificant, it's going to be much less than 10, because we're trying to do things efficiently, they are trying to do things fast.

So, yes, a 600-1 difference is a drop in the bucket. A 20% increase in the demand from the army group is equates to a 1 in 3000 increase in demand... but suppose it's doubled (peacetime armies use energy, too) in the last decade, solely due to the war... That would be a mere 1 in 600 increase in total demand for oil.

Contrast with the fact that the demand from India and China has almost certainly doubled in the last 10 years (A guess, I admit -- someone can feel free to correct that either way with a real statistic), which, if correct, would be equivalent to a 2/3rds increase in demand. so, a 67% increase in demand, vs. a 0.17% increase in demand.
Which is likely to be far and away the master driving force in the price of oil and gas?
Which one is comparatively, utterly insignificant???

I dunno, *I* can't tell. Can you?
(ouch! it hurts when my eyes roll that far back in my head!!)

The war has certainly added some short-term uncertainties, which contributes -- but it's not a fraction of the input into the supply-demand curve of two massive economies -- each independently larger than the entire existing industrial world -- jumping onto the industrial bandwagon with both feet.

...Which is how your "thimble" just got stomped on.

To repeat Pauli's comment on your assertion:
"This isn't right. This isn't even wrong."

At 5/05/2008 4:29 PM, Anonymous Anonymous said...

Some people just want it to be Bush's fault. It just has to be. No empirical data, just assertions and guesses. Tanks use gas; we have tanks; we are at war; that's why gas is high. I guess that flies in groupthink circles. If you want to tie Bush to the price of gas, blame his cut taxes / increase spending economic policy that has resulted in massive budget deficits, which has negatively impacted the value of the dollar causing oil that is priced in US dollars to rise correspondingly. That has had a much bigger impact on the price of oil than added consumption to fight the war.

At 5/08/2008 7:45 PM, Anonymous Anonymous said...

the "demand" for oil goes down precipitously, because now there is an alternative to satisfying the demand for energy. There is "competition" where currently there is none.
Why do people bash ethanol then. Don't give me bull about food shortage. It is a hybrid corn, high in starch not used for food, that ethanol is made from. The by-product being a high protein animal feed.


Post a Comment

<< Home