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About that Windfall Tax on Big Oil – Not!

Posted by rightwinger on December 5, 2008

Obama has wised up and realizes that in the wake of plummeting oil and gas prices, implementing the Big Oil windfall tax is a bad idea.  Well Veer Right already knew it was a bad idea.  Tell me if Big Oil can control the price, why has it fallen so dramatically?  Might it be supply and demand.  If we don’t increase our domestic supply, then the prices will go up again and much worse.  We have to drill here and now in the US.  They are now estimating that the oil in the Western US outnumbers Saudia Arabia by 10 times.

On Tuesday, an aide to the president-elect’s transition team said Obama was dropping his plan for a new windfall profits tax because oil prices had dropped below $80 a barrel and were expected to stay there. Oil prices have fallen from a record $147 a barrel in July to less than $50 a barrel this week.

During the campaign, Obama announced an Emergency Economic Plan that would give families a stimulus check of $1,000 each and individuals $500 each, funded in part by what his presidential campaign called “windfall profits from Big Oil.”

“I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs, and other bills,” the Illinois senator said in a campaign speech in Raleigh, N.C.

Obama forgot to mention that, in 2007, Exxon paid income taxes of $30 billion on revenue of $390 billion and net income of $40.6 billion. Including income, sales-based and all other taxes, Exxon paid $105.7 billion in 2007 taxes, or about 44% of its revenue.

In 2007, a record year, oil companies earned 8.3 cents per dollar of sales. Beverage companies and cigarette makers, by contrast, earned 19.1 cents. Drug makers, 18.4 cents. All manufacturers made 8.9 cents on average, more than “Big Oil.”

And what did they do with their “record profits”? Aside from paying record taxes, they spent an awful lot to find new sources of domestic energy. According to Ernst & Young, from 1992 to 2006 the U.S. oil industry spent $1.25 trillion on long-term investment vs. profits totaling $900 billion.

Read the article for yourself.


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