Tuesday, April 1, 2008

Congress - the real April Fool's joke

I saw this story that Congress is up in arms again over how much those evil oil companies are raking in. I'm pretty tired of hearing it - especially when the government makes more money off of the oil companies than the companies themselves. Yep, they take more from Big Oil in taxes than what those scoundrels are left with.

Anyway, the story linked to above had a funny line from an Exxon exec:
Alluding to the fact that Congress often doesn't rate very high in opinion polls, Cleaver told the executives: "Your approval rating is lower than ours, and that means you're down low."
The following is a repost from November of 2005.

One thing that is becoming popular of late is wanting to force an earnings cap on private companies. It's under the guise of helping Americans because the "official" target is "Big Oil." Yesterday, I heard Rush Limbaugh give a statistic that "Big Oil" earns 10 cents on every gallon of gas sold and that "Big Government" earns 45 cents. I thought this was really strange and that Big Oil had to make more than this, but I didn't feel like researching it. Well, this morning I noticed The real windfall in my Bloglines from the Mises Institute (an economics website).

Last week, after Exxon Mobil (XOM) published record quarterly profits of $9.9 billion, Senate Majority Leader Bill Frist called for hearings to see whether a windfall profits tax should be imposed. Checking the SEC 10-Q filing reveals the following:

Now, let's break this down.

Exxon Mobil paid $25.8 BILLION in taxes the 3rd Quarter. They were in a 41.8% tax bracket. This means that they took in about $61.7 Billion and were left with around $35.9 Billion. After their expenditures, they profited less than 17% of their total earnings.

Finally, the citizens and government officials seem to be really upset that Exxon Mobil made nearly $10 Billion in the quarter. Putting this chart to practical use, please note that the Government profited $4 Billion more in 3Q 2005 than in 3Q 2004. We have to have some accountability here. The government took in nearly three times more money ($25 Billion) than Exxon's net profits ($9.9 Billion) and they are wanting more.