Should it be considered "our" money if Exxon extracted offshore oil from public waters in the Gulf of Mexico without paying any royalties to the government because of a loophole in the law? That's almost like someone looting your possessions and then selling them back to you.

 

The oil companies are paying for extracting oil from public lands. They pay for the right to drill. They also pay a tax on every barrell of oil they extract. Previously, if the price of oil went above a certain price, the oil companies had to pay more per barrell in taxes. The tax break charges the same amount of tax per barrell even if the price per barrell goes up. The discussion isn't about if the oil companies should be taxed on oil taken from public lands. The discussion is about the rate at which they should be taxed.

 

Apparantly you and Francis believe a 47% total tax rate is too low.

The oil companies are paying for extracting oil from public lands. They pay for the right to drill. They also pay a tax on every barrell of oil they extract. Previously, if the price of oil went above a certain price, the oil companies had to pay more per barrell in taxes. The tax break charges the same amount of tax per barrell even if the price per barrell goes up. The discussion isn't about if the oil companies should be taxed on oil taken from public lands. The discussion is about the rate at which they should be taxed.

 

Apparantly you and Francis believe a 47% total tax rate is too low.

When Exxon posts the profit they did, it seems some part of the equation is out of whack.

When Exxon posts the profit they did, it seems some part of the equation is out of whack.

 

So if a company makes a large profit it's a "problem" that needs to be "fixed" by raising their taxes?

So if a company makes a large profit it's a "problem" that needs to be "fixed" by raising their taxes?

 

I agree, taxing profits simply because they are profits is absurd. But in this case there is a problem, yet no amount of taxation will fix it. There is something much larger here if a company can get taxed at 47% and still post those kinds of profits. It is a lack of competition...and probably some under the table deals keeping gas prices up.

So if a company makes a large profit it's a "problem" that needs to be "fixed" by raising their taxes?

How about the AT&T solution? Break up Exxonmobil like they did Ma Bell because they were making too much money. Nevermind that they were the most widely held stock at that time. If they're big and profitable, they're evil.

Let's see how far your Libertarianism goes.

 

How about the 3% loans from the SBA after natural disasters like Katrina.

How about tax breaks to start small businesses in areas of major cities that business are vacating because of crime left and right?

How about tax breaks for small businesses to handle the cost of providing heath care for their employees?

How about tax breaks given to factories to establish their new factory with 500 jobs in a certain community?

How about providing subsidies or price floors to certain industries to make them more competivie with foreign countries?

How about tax/funding benefits for minorities or women to start their own businesses?

 

I could go on. There are many, many great tax advantages given to companies. And there are some that are ridiculous. I don't think it is fair to brush with such a broad stroke against them.

 

How far my Libertarianism goes? I'm not sure exactly where I draw the line, but wherever it is, the idea of giving tax breaks to companies that are pocketing $10 BILLION PER QUARTER is on the other side of the line.

 

On the other hand, if you feel like these oil giants need, or deserve, these windfalls, that is fine. I'll wait to see if you change your tune when the price of a gallon of gas nears $3.00 (again) or even $4.00.

 

 

Frances

In the 1Q of 2006 Exxon's profit was "untaxed" at a rate of $100 billion per year. See above.

 

Also, most "loopholes" in the tax code were put there on purpose. Some loopholes are accidental but most are written with the express intent of benefiting a specific group.

 

At no point did I indicate that Exxon didn't pay any taxes, so I'll pass on your attempt to force me to defend a point that I didn't make. What I DID say (and what H has pointed out to you multiple times) is that the oil companies didn't pay taxes on A PORTION of their income. Notice the difference?

 

 

 

Frances

I agree, taxing profits simply because they are profits is absurd. But in this case there is a problem, yet no amount of taxation will fix it. There is something much larger here if a company can get taxed at 47% and still post those kinds of profits. It is a lack of competition...and probably some under the table deals keeping gas prices up.

 

And this is where Habib and I agree. Until the spineless people that sit in Congress can somehow find their eyeglasses, they will continue to be unable to find collusion between the oil companies when it comes to setting the prices of their product on the open market.

 

Oddly, this is the same august body that was able to find that the owners of Major League Baseball were colluding in an effort to hold down salaries for baseball players, but amazingly, they can't seem to put their finger on the fact that in any given area, the cost of a gallon of gasoline rises and falls in lockstep across every station in a given radius.

 

 

Frances

How about the AT&T solution? Break up Exxonmobil like they did Ma Bell because they were making too much money. Nevermind that they were the most widely held stock at that time. If they're big and profitable, they're evil.

 

AT&T is an excellent example, HHSDad. They didn't break 'em up because of their profits - they broke 'em up because they were a true monopoly.

 

The result of that breakup of a monopoly is that we no longer have party lines, we no longer pay exorbitant fees for a long distance call, we now have wireless calling on our cell phones, we can buy any phone we want from any company we want, we have nationwide calling plans, etc., etc., etc.

 

None of which, by the way, would EVER have happened prior to the breakup of AT&T.

 

 

 

Frances

So if a company makes a large profit it's a "problem" that needs to be "fixed" by raising their taxes?

Never said that. You said it.

 

I just said some part of the equation is out of whack.

 

I have consistently railed against our demand for fuel. As a society, we drive SUV and trucks that get 9 MPG and complain about the price. That part of the equation is out of whack.

 

With the amount of profit they made, it sure seems logical that they could lower their profit margin a little and not be hurting. How about cutting their profit margin in half and only making 16 billion in profit this year. Not sure anyone in the Exxon company is going to go hungry at that profit rate.

 

I would NOT be for taxing profits any more than is presently done unless some creative plan came through. It would be intriguing to consider a plan of increasing taxes on a company with profits over let's say a billion. It seems in that neighborhood, their profit margin might be a little excessive. As I said, that would be something to consider as I have personally considered it as long as it took for me to type this paragraph.

And this is where Habib and I agree. Until the spineless people that sit in Congress can somehow find their eyeglasses, they will continue to be unable to find collusion between the oil companies when it comes to setting the prices of their product on the open market.

 

Oddly, this is the same august body that was able to find that the owners of Major League Baseball were colluding in an effort to hold down salaries for baseball players, but amazingly, they can't seem to put their finger on the fact that in any given area, the cost of a gallon of gasoline rises and falls in lockstep across every station in a given radius.

 

 

Frances

Well for the most part, that is called price competition. We have a local service station that offers an unannounced gas sale each week. Takes about 10 cents off what the price is usually. When that occurs, amazingly the other stations have matched that price very early in the morning.

 

That could be nothing more than price competition. My competitor selling it for $2.10, than I cannot charge $2.25 and expect to stay in business.

AT&T is an excellent example, HHSDad. They didn't break 'em up because of their profits - they broke 'em up because they were a true monopoly.

 

The result of that breakup of a monopoly is that we no longer have party lines, we no longer pay exorbitant fees for a long distance call, we now have wireless calling on our cell phones, we can buy any phone we want from any company we want, we have nationwide calling plans, etc., etc., etc.

 

None of which, by the way, would EVER have happened prior to the breakup of AT&T.

 

 

 

Frances

Not sure how A T & T and the baby bells equates to the oil companies. There is NOT one company that controls the market as the Bell company was. There is competition. Might not be perfect competition or the type that we like, but there is competition.

 

On your libertarian views, would you be for tax breaks for these billionaires to search for alternate sources of energy and other ways to fuel our vehicles besides oil?

At no point did I indicate that Exxon didn't pay any taxes, so I'll pass on your attempt to force me to defend a point that I didn't make. What I DID say (and what H has pointed out to you multiple times) is that the oil companies didn't pay taxes on A PORTION of their income. Notice the difference?

 

 

 

Frances

 

The difference does not exist. Exxon didn't pay taxes on the first X number of barrells of oil they extracted and then not pay taxes on every barrell afterwards.They paid taxes on every barrell of oil they took out of the ground so they paid taxes on all the income derived from that oil. The tax rate may have been lower per dollar of income but they paid taxes on each barrell.

 

Here's an everyday example. When you go to the gas station and buy gas, part of what you pay is a federal excise tax of about $.18 per gallon (The state adds some too but we'll stick with federal). You pay that tax on every gallon of gas that you buy. It's the same if the price at the pump is $2.00 or $3.00. That dollar difference between $2.00 and $3.00 wasn't "untaxed". It was taxed at $.18 per gallon just like it was taxed when gas was $2.00/per gallon.

Well for the most part, that is called price competition. We have a local service station that offers an unannounced gas sale each week. Takes about 10 cents off what the price is usually. When that occurs, amazingly the other stations have matched that price very early in the morning.

 

That could be nothing more than price competition. My competitor selling it for $2.10, than I cannot charge $2.25 and expect to stay in business.

 

It isn't competition when only four companies can reap the benefits. There is no way any upstart company can build an oil refinery, let alone offer cheaper gas. It is in the best interesest of the oil companies to set prices as high as we will pay. As long as they do that, and they don't undercut each other, they get the kind of profit they have.

 

And as far as your local station goes, each station owner has a mild amount of discretion for prices. True competition would involve new companies offering even lower prices, forcing the general price of gas down, not just a 10 cent deduction every now and then.

The difference does not exist. Exxon didn't pay taxes on the first X number of barrells of oil they extracted and then not pay taxes on every barrell afterwards.They paid taxes on every barrell of oil they took out of the ground so they paid taxes on all the income derived from that oil. The tax rate may have been lower per dollar of income but they paid taxes on each barrell.

 

Here's an everyday example. When you go to the gas station and buy gas, part of what you pay is a federal excise tax of about $.18 per gallon (The state adds some too but we'll stick with federal). You pay that tax on every gallon of gas that you buy. It's the same if the price at the pump is $2.00 or $3.00. That dollar difference between $2.00 and $3.00 wasn't "untaxed". It was taxed at $.18 per gallon just like it was taxed when gas was $2.00/per gallon.

 

Okay, I give.

 

After 3,951 posts, it is obvious that you are not going to acknowledge that paying a reduced rate on their raw materials is a tax break.

 

You've convinced me - the oil giants are our friend, and we should feel guilty because we didn't eliminate their tax burden completely. I will try to contact the people that teach economics at the various universities around the country, to let them know that they don't truly understand how money is raised by the levying of taxes.

 

 

Frances