CNN reports:
Exxon Mobil, the leading U.S. oil company, said its third-quarter net profit was $14.83 billion, [or] $1,865.69 per second, nearly $400 a second more than the prior mark.
No U.S. company has ever earned more profit in a single quarter.
To put things into perspective, $14.83 billion is enough to wipe out the crippling external debts of Malawi, Lesotho, Swaziland, The Gambia, Eritrea, Botswana, Djibouti, Guinea-Bissau, Central African Republic, Burundi, Benin, Burkina Faso, Rwanda, Uganda and Sierra Leone put together, with more than $600 million left over — which incidentally is how much consumers have paid so far for the Rock Band video game.
Also, for a measly $10 billion, we could completely eradicate malaria, “a leading cause of death worldwide” that kills 853,000 children under the age of five every year, according to the Centres for Disease Control.
Don’t get me wrong, there’s nothing wrong with profits — even big ones — but the way a society distributes its money does say something about its values. When we ignore poverty both at home and abroad, but give a company like Exxon a $36.8-million tax break for having chipmunks on its land in Texas, that speaks clearly about our priorities.
Exxon says it’s giving back big-time, and is quick to point out that it paid an impressive-sounding $27.9 billion in taxes last year. But it’s not so quick to point out that this was only 7.5% of the $373 billion it took in.
What percentage of your income do you pay in taxes? Maybe it’s time to rustle up some chipmunks and move to Texas.
15 responses so far ↓
1 JIm Dicken // Oct 31, 2008 at 2:59 pm
Ummm since when is 27.9 Billion in taxes 7.5 % of the Gross Profit of 14.3 Billion?
Profit is what we tax in this country. NOT EARNINGS and when you gifure that drilling an oil well can cost as much as a billion dollars with a possibility of NO return then you see why your figure is so Assinine.
Exxon paid 100% more in TAXES than they profited.
2 mark // Oct 31, 2008 at 3:54 pm
That’s kind of the point, Jim — that only Exxon’s profits are taxed, whereas the average worker is taxed on his/her entire revenue, and much more heavily than Exxon is at that.
You’re right to point out that capital investments and money spent on oil exploration and the like shouldn’t be taxable. But I don’t think it’s asinine to point out that tax breaks for hugely profitable companies who sell an essential resource at inflated prices aren’t in America’s interest.
Still, I can see how the title here might have been misleading, so following your comment I changed it.
3 Anon // Oct 31, 2008 at 4:45 pm
mark,
Do you really believe that corporations should pay income tax on revenues? Do you understand what that would do to the economy? Taxing revenues would cause a very large number of businesses operating at or near break-even (or even at a profit) to show a loss.
Really. What are you trying to say with this post?
4 Jim Dicken // Oct 31, 2008 at 4:59 pm
Anon,
Apparently you see my point. Paying taxes on REVENUE is not going to work. Had Exxon paid taxes on revenue they would have lost money for the quarter. As it is they paid 66% of the profit to the US Government who benefitted from this record profit MORE than Exxon and that is what Obama is going to do. Raise taxes on the very businesses that are making the government the most money. IN return the taxes will reduce them to less than profitable and end up shutting them down or making them Government owned entities.
Mark is to young apparently to see that workers are NOT taxed on revenue. If we were then the taxes we pay would be included and we would be paying TAXES on the TAXES… thus NO ONE would make any money.
MY POINT is that EXXON PAID 66% tax not 7.5% and the author is a moron, or in the pocket of Obama.
5 Data Loss Horror Stories // Oct 31, 2008 at 5:02 pm
Good… now they can pay for the clean up from Valdez.
6 Jim Dicken // Oct 31, 2008 at 5:11 pm
Mark, the coment should say Exxon pays RECORD TAXES. Americans do not pay taxes on revenue or total gross income. We deduct certain expenses, like uniforms, our mortgages, if we are a small business we deduct computers, paper, printing, etc… Exxon paid 66% on their NET Profit just like any other business. Sort of shoots down your argument on Record Profits and trying to SHAME Exxon when they paid the MOST taxes of any company in History.
Again the media is hyping the wrong aspect.
Exxon broke the record for paying taxes. They paid nearly 100% more in taxes than they made.
And having been to Alaska for 3 months this year I believe they should pay reperations.
7 Chris Modlmayer // Oct 31, 2008 at 5:22 pm
Any company that makes $15B profit in 3 months is gouging. You can talk all day about taxing revenue vs. profit, or about supply and demand; I don’t care. All the arguments in the world (and I’ve heard them) won’t convince any sane person that there’s nothing inherently wrong with a system that allows a company to make that much money.
Where’s my 97% refund on my property taxes? I’ve got all kinds of wildlife in my back yard. Oh right, I’m not a corporation. I should incorporate; for $45/year I’ll have more rights than I did as a human being.
8 Jim Dicken // Oct 31, 2008 at 6:20 pm
How in the hell do you know that they are gouging. The cost of gasoline was not Exxon’s fault. The darn speculators bid the price up and did so to make money off of YOU. Exxon just got a free ride. Beyond that is the simple fact that there are not enough Refineries to keep enough gasoline in the pipelines thanks to you liberals.
Again showing your ignorance of how the economy works. Supply and demand run the market. When supply is low then prices are ..?? come on you can say it.. YEP HIGH as a kite my friend.
NOW raise prices to all time highs and demand sours and they drop like a rock.. and what just happened? Free Market always works. Exxon’s profits in the next Quarter will most likely be way down. Summer is over and so are vacations.
IF we get to drill and build refineries gasoline prices will stay down.
IF Obama wins we will get higher prices cause the taxes they pay which were 66% will go up to 75% thus stalling any new drilling or refineries cause there wont be enough money to do it.
Then the dumb SOB is going to turn around and give the very people he wants to tax a break cause low and behold he said in his speech the other night we are gonna retool the Auto Industry… AKA who depends on Auto’s.. the OIL COMPANIES who are doing the research on New Fuels and who have the distribution system already in place.. so in the end Obama your man is NO BETTER than a Republican only the Republicans are gonna make the Businesses pay for their own retooling and Obama is gonna make YOU PAY TO RETOOL.,… TOOL.
9 brian // Nov 4, 2008 at 2:10 am
I dont’ think so Jim. I make millions in profits and on my earnings I only claim $100,000. I don’t need anyone touching my millions, forget that its mine.
10 Jim Dicken // Nov 4, 2008 at 3:22 am
Huh??????????????????
You only claim a $100,000 in earnings? Do you fill out a tax form? YOU MAKE MILLIONS?? I dont think so. If you did you could express your self a bit better and you would not bother posting here.
11 mark // Nov 5, 2008 at 1:16 pm
Anon, I’m not saying corporations should pay income tax on all revenue. I’m saying that it’s disingenuous for a company like Exxon to complain about taxes when the combination of its record-smashing profits and higher-than-ever gas prices in the U.S. is proof that it’s price-gouging on an essential resource.
Likewise, it’s reasonable to impose high taxes on a company that creates massive pollution, and that requires government spending to clean up after it as a result.
We ought to offer tax breaks to companies not for having chipmunks on their land, but for doing things that we believe to be in the public interest. We provide subsidies for running environmentally friendly operations, for instance, and for R&D that leads to new beneficial technologies and the like. Tax penalties for irresponsible behaviour are a logical extension of this, and Exxon is hardly a responsible corporate citizen — even compared with other oil companies.
You could even argue that, in one respect at least, Exxon’s interests are diametrically opposed to America’s, since Exxon’s profits are directly tied to soaring oil consumption and skyrocketing gas prices, neither of which is good for America.
12 Chris // Nov 5, 2008 at 6:06 pm
This angle has been mentioned only in passing: how much better off is the US government _because of_ the huge number of tax dollars generated by Exxon? That is, where would the government be without Exxon? Well, it seems to me the tally would have to go beyond just the billions in tax dollars generated by gasoline sales. Oil products are an essential part of every industry in this country. So remove Exxon from the picture and those industries all suffer too (see Jim’s supply-demand remarks).
A few more thoughts…
“it’s reasonable to impose high taxes on a company that creates massive pollution, and that requires government spending to clean up after it as a result.”
Exxon should definitely be held responsible for the cleanup costs. We agree here. Although I’m not sure taxing them is the way to do it because that doesn’t necessarily mean the mess gets cleaned up properly. It just means government has some extra dough and maybe they’ll use it to cleanup. I’d much rather see a law in place that stipulates that a company must clean up their own messes and then let Exxon do what they will to clean things up. Exxon would surely be more efficient than government in executing this cleanup project, don’t you think?
“We ought to offer tax breaks to companies not for having chipmunks on their land, but for doing things that we believe to be in the public interest.”
This is one of my biggest problems with so many collectivist (big government) arguments. They often talk about doing things “we” believe to be in the public interest. It’s just too subjective. Not only that, but a bit arrogant to talk as if your voice is representative.
“You could even argue that, in one respect at least, Exxon’s interests are diametrically opposed to America’s, since Exxon’s profits are directly tied to soaring oil consumption and skyrocketing gas prices, neither of which is good for America.”
You lost me on this one. How are Exxon’s profits “directly” tied to soaring oil consumption and skyrocketing gas prices? Did you miss the part of economics 101 that talks about supply and demand? It seems to me that higher Exxon profits = higher price of oil = less demand. It would then follow that less demand = less consumption, right?
13 Chris // Nov 5, 2008 at 6:31 pm
Just one more thought. There are plenty of companies that make similar profit margins to the oil companies. PLENTY. Why are the oil companies the only ones getting villified for this? Because they are perceived as anti-environment, right? I’m not going to dispute that oil companies are the source of a lot of pollution. I would just invite more honesty in the arguments against oil companies.
14 mark // Nov 6, 2008 at 11:20 am
It’s naive to argue that the price at the pump is entirely dependent on supply and demand — of course this is a major factor, but another big one is the profit margin that Exxon decides to set on each gallon of gas it sells. Clearly, $14.83-billion in profits over just 90 days indicates that this margin is high.
No one is saying Exxon should be “removed from the picture,” or that they shouldn’t be allowed to earn a hefty profit — only that they should be held accountable for price-gouging at a time when Americans can ill afford to be gouged, and for polluting massively while insisting time and again that the jury’s still out on what causes climate change.
It’s true that oil companies have a tougher PR battle to fight than other companies, and it’s also true that part of this is an unreasonable kneejerk reaction. But their environmental record — and Exxon’s most of all — is part of the reason for this, and jacking up gas prices to earn record profits doesn’t help their public image either.
15 Doug // Dec 6, 2008 at 4:17 pm
I wonder if the same people that arewcomplaigning about the profits of oil companies. Have no problem going to a restuarant and ording a 7 dollar steak and paying 30 dollars for it?
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