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Big Oil is run by greedy dicks, part 2

Old 06-12-08, 08:34 PM
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Big Oil is run by greedy dicks, part 2

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http://forum.dvdtalk.com/showthread.php?t=443022
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Old 06-12-08, 08:40 PM
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^^^

Originally Posted by Birman54
I read the other day that in the past 25 years, Oil companies have paid 3x as much taxes as they've taken in as profit - more than 2 trillion dollars. Does anyone know if that's accurate? It would seem to take a bit out of the 'excessive profit' argument.
It kinda takes a bit out of the common sense argument.

Why would you, as a business, be willing to stay in business, if your taxes are 3-times your profits.

It juzz don't make sense, Willis.
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Old 06-12-08, 08:41 PM
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best title evar
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Old 06-12-08, 09:11 PM
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Originally Posted by DVD Polizei
^^^



It kinda takes a bit out of the common sense argument.

Why would you, as a business, be willing to stay in business, if your taxes are 3-times your profits.

It juzz don't make sense, Willis.
Well I'd assume "profit" is total revenue less taxes, operating costs, etc. Taxes could be a major cost, along with R&D, advertising etc. It really jumps if you include the various gas taxes.

http://www.reason.com/blog/show/126976.html


Or just economic ignorance-you decide. Earlier this week, Americans were treated to the unedifying spectacle of Senate Democrats trying to impose a "windfall profits tax" on Big Oil. They evidently hoped that the Americans, reeling from $4 per gallon gas, would just love the idea of sticking it to rich oil companies. One problem: higher taxes on oil companies mean higher prices at the pump.

In any case, the country has had a previous bad experience with "windfall profits taxes" on oil companies. In 1980, as a parting gift, President Jimmy Carter and Congressional Democrats imposed just such a tax. How did it work out? Not so well. In 2005, the Tax Foundation looked at the issue and pointed out that the Congressional Research Service...

...found the windfall profits tax had the effect of decreasing domestic production by 3 percent to 6 percent, thereby increasing American dependence on foreign oil sources by 8 percent to 16 percent. A side effect was declining, not increasing, tax collections.

Great idea, huh? But it gets even worse. In 2005 Congressional testimony, ConocoPhillips CEO James Mulva cited the same CRS study as finding...

...the windfall profits tax that was signed into law in 1980 and repealed in 1988 drained $79 billion in industry revenues during the 1980s that could have been used to invest in new oil production-leading to 1.6 billion fewer barrels of oil being produced in the U.S. from 1980-1988.

So not only does a "windfall profits tax" boost prices now, it reduces investment in oil exploration helping to keep prices high in the future. Let's call that a "lose-lose" for American motorists.

And by the way, just how much in taxes has Big Oil paid? Back in 2005, the Tax Foundation reported...

...over the past 25 years, oil companies directly paid or remitted more than $2.2 trillion in taxes, after adjusting for inflation, to federal and state governments-including excise taxes, royalty payments and state and federal corporate income taxes. That amounts to more than three times what they earned in profits during the same period, according to the latest numbers from the Bureau of Economic Analysis and U.S. Department of Energy.

Meanwhile Congressman John Peterson (R-Penn.) is making a much more helpful proposal for eventually lowering gasoline prices-drop the Congressional moratorium on oil and gas exploration on the outer continental shelf (OCS). The U.S. Minerals Management Service estimates that the OCS contains nearly 86 billion barrels of oil and 420 trillion cubic feet of natural gas. Note that the U.S. consumes roughly 7.5 billion barrels of oil and 23 trillion cubic feet of natural gas annually.

Last edited by Birrman54; 06-12-08 at 09:22 PM.
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Old 06-12-08, 09:43 PM
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Originally Posted by DVD Polizei
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It kinda takes a bit out of the common sense argument.

Why would you, as a business, be willing to stay in business, if your taxes are 3-times your profits.

It juzz don't make sense, Willis.
I'd be willing to pay 2.2 trillion in taxes, if that meant I had roughly 700 billion in net profit afterwards. Of course I'd also need the 20 trillion in revenue or whatever the number is.
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Old 06-13-08, 09:58 AM
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Originally Posted by DVD Polizei
^^^
It kinda takes a bit out of the common sense argument.

Why would you, as a business, be willing to stay in business, if your taxes are 3-times your profits.

It juzz don't make sense, Willis.
Most companies have higher tax rates than profit margins. I would bet dollars to doughnuts that Wal-Mart pays way more in taxes than they make profit.

Last edited by orangecrush; 06-13-08 at 10:22 AM.
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Old 06-13-08, 10:14 AM
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I heard Exxon/Mobil is selling off the remaining retail gas stations they own. The retail gas stations don't make enough profit from the sale of gas to be worth it for Exxon/Mobil.
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Old 06-13-08, 10:25 AM
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Originally Posted by Dave99
I'd be willing to pay 2.2 trillion in taxes, if that meant I had roughly 700 billion in net profit afterwards. Of course I'd also need the 20 trillion in revenue or whatever the number is.
The difference is you're not a corporation who is accountable to shareholders.

Do people really not think that taxes aren't just passed back down to consumers? Seriously?
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Old 06-13-08, 10:37 AM
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Originally Posted by mosquitobite
Do people really not think that taxes aren't just passed back down to consumers? Seriously?
Of course the taxes will be passed back down to the pump price. The windfall tax addition will not lower prices at the pump, so using high gas prices as a justification for it makes no sense. If you're going to actually use the money for research into alternative means of transportation, that's another story.

I do think that giving oil companies huge tax breaks is a joke when they're making record profits. There's plenty of other places those tax breaks could go.
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Old 06-13-08, 10:41 AM
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Obviously I think the "windfall tax" thing is a load of crap, but for those that support it, what method do you use to determine the amount of profit is fair for each company? Do you base it on profit per gallon? Do you take the size of the company into account? Do you compare it with other energy sectors? Do you tax oil companies like Ted Kennedy has ownership in, or does that still get tax breaks because of its size?

I would honestly like to hear what method supporters would use.
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Old 06-13-08, 10:50 AM
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Originally Posted by DVD Polizei
It kinda takes a bit out of the common sense argument.

Why would you, as a business, be willing to stay in business, if your taxes are 3-times your profits.

It juzz don't make sense, Willis.
I would agree with you, but only if we were talking about EBITDA.
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Old 06-13-08, 12:02 PM
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Originally Posted by DVD Polizei
^^^



It kinda takes a bit out of the common sense argument.

Why would you, as a business, be willing to stay in business, if your taxes are 3-times your profits.

It juzz don't make sense, Willis.
profits and cash flow are two different things
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Old 06-13-08, 12:26 PM
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So is no one disputing that number? In that case, a grundle-esque question:

Who deserves to make the most profit from oil exploration, refining, and delivery? The Oil Companies or the Government?

And which one is greedier?
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Old 06-13-08, 12:28 PM
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Originally Posted by Birrman54
Who deserves to make the most profit from oil exploration, refining, and delivery? The Oil Companies or the Government?

And which one is greedier?
Taxes are revenue for the government, not profit.

I think some people need to take a Business .101 course.
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Old 06-13-08, 12:51 PM
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Originally Posted by The Bus
Taxes are revenue for the government, not profit.

I think some people need to take a Business .101 course.
Depends on which government we are talking about I suppose.
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Old 06-13-08, 01:00 PM
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Originally Posted by The Bus
Taxes are revenue for the government, not profit.

I think some people need to take a Business .101 course.
I suppose if you approach it from the standpoint that all businesses owe the government some sort of tithe. I accept the gasoline taxes (which do account for the bulk of the gov revenue) - they're meant to pay for our roads and highways. This is a legitimate use tax although it's probably inefficiently administered and leads to abuses like DUI laws.

My only question was the politicians get to rail against the greedy oil companies for their huge windfall profits - meanwhile the politicians' actions are the reason the oil prices are out of control in the first place. Prevented resource exploration, weakened the dollar, absurd ethanol nonsense, prevention of nuclear development, you name it.

The various 'soak the rich' nonsense thrown out by these people is a red herring, nothing more.
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Old 06-13-08, 01:03 PM
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politicians need to go on TV to find a boogeyman to get reelected. now it's the speculators' fault oil prices are so high.

it's like 1984, you need to find someone for the proles to hate so they don't take their anger out on you
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Old 06-13-08, 01:08 PM
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Originally Posted by orangecrush18
Depends on which government we are talking about I suppose.
If taxes are the government's "profit" what is the government's revenue? What minus what equals the taxes they receive?

Originally Posted by Birrman54
I suppose if you approach it from the standpoint that all businesses owe the government some sort of tithe.
I approach is as "revenue" because it is money the government receives from sources outside of itself. If it makes more sense to you to call it "gross receipts" or "money coming in" then that's fine.

But taxes aren't profit.

Originally Posted by Birrman54
The various 'soak the rich' nonsense thrown out by these people is a red herring, nothing more.
Correct.
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Old 06-13-08, 01:09 PM
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Am I the only one who is bothered by these commercials? It's like the tobacco companies' commercials promoting ways to quit smoking.

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/Ucpo-ubneLQ&hl=en"></param><embed src="http://www.youtube.com/v/Ucpo-ubneLQ&hl=en" type="application/x-shockwave-flash" width="425" height="344"></embed></object>

I can't stand that freakin' lady. Let's do nothing! Oil is great! YOU own oil companies too! Don't be mean to us!
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Old 06-13-08, 01:14 PM
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Originally Posted by CRM114
Am I the only one who is bothered by these commercials? It's like the tobacco companies' commercials promoting ways to quit smoking.

I can't stand that freakin' lady. Let's do nothing! Oil is great! YOU own oil companies too! Don't be mean to us!
Public Relations my man. They pay PR firms a LOT of money to influence people's opinions. I used to work for one.
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Old 06-13-08, 01:19 PM
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Originally Posted by al_bundy
politicians need to go on TV to find a boogeyman to get reelected. now it's the speculators' fault oil prices are so high.

it's like 1984, you need to find someone for the proles to hate so they don't take their anger out on you
Do you not believe Enron had anything to do with the so-called energy crisis in CA years ago? Why is not the speculators' fault?
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Old 06-13-08, 01:20 PM
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Originally Posted by VinVega
Public Relations my man. They pay PR firms a LOT of money to influence people's opinions. I used to work for one.
Well, it backfired for me. Those commercials irritate the hell out of me with their condescending tone.
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Old 06-13-08, 01:21 PM
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Originally Posted by CRM114
Am I the only one who is bothered by these commercials? It's like the tobacco companies' commercials promoting ways to quit smoking.

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/Ucpo-ubneLQ&hl=en"></param><embed src="http://www.youtube.com/v/Ucpo-ubneLQ&hl=en" type="application/x-shockwave-flash" width="425" height="344"></embed></object>

I can't stand that freakin' lady. Let's do nothing! Oil is great! YOU own oil companies too! Don't be mean to us!

THey don't bother me. I tend to agree with them. I think people should watch them and think about their own beliefs regarding "evil oil" and hopefully think about the government's inaction in energy policy that is creating the problem, rather than some oil company.
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Old 06-13-08, 01:21 PM
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Originally Posted by The Bus
If taxes are the government's "profit" what is the government's revenue? What minus what equals the taxes they receive?
I assume that in some African countries profit = revenue. And thanks for pointing out my failed attempt at a joke.
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Old 06-13-08, 01:24 PM
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Originally Posted by CRM114
Well, it backfired for me. Those commercials irritate the hell out of me with their condescending tone.
My guess is that if it were a condescending tone regarding the war in Iraq, it would bother you less.
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