Exxon makes 14.8 billion

[Isamemon]

so for the last quarter exxon made a PROFIT of 14.8 billion
yet the execs are worried that next quarter wont be so good as price for oil is down adn demand is down
I feel real sorry for them , maybe we will have to bail them out next. sure they would do it for us

[James.A]

...what would be a fair profit?, expressed as a percentage of gross receipts or an actual dollar amount? Enquiring minds want to know.

[Mika]

The profit after all expenses resulting from selling a product at market prices where a willing buyer and willing seller agree on price

[hlothery]

The profit after all expenses resulting from selling a product at market prices where a willing buyer and willing seller agree on price

Sounds very fair to me, also. After all, you don't have to purchase their products if you don't want to. But if you want them, you want them readily available, and get angry if they are not. Can't have it both ways. :dunno

I have always found it interesting that some of the same people will rant about the oil company's profits, and still change their oil every three thousand miles.


Oh no............not an oil thread!:banghead

[k75sprint]

Who decides what is fair or unfair when it comes to a companies profits? Something tells me that if you had a business and was told that you make too much money and need to shut down or pay more taxes than your competitors, just to make it "fair", perhaps one might see it a bit differently.

[Mika]

I think you are asking only one part of a two part question, who and why.

In the transaction the buyer may offer a lower price because they think you are making to much money.

People not in the market say you are making too much because you they can not afford the product.

And yes, regulators that have taxing authority will tax profits for what ever reason under their authority.

There are all sorts of answer to who, the company has to figure out the why in coming to a resolution that leaves them on going and with a profit.

[ridenrd]

Why is it that only Exxon profits seem to make headlines? BP, Chevron and Shell make within a billion or two of Exxon's profit annually yet you seldom hear them mentioned. When the price of a barrel drops steadily, where is the news report on Exxon's losses? Surely there are companies in other sectors who make billions in profits annually. Why no mention of them?

[Mika]

Perhaps because they are the biggest. Room for only the benchmark in headlines and the lead, the others usually make the body of the articles.

[OfficerImpersonator]

The gasoline market is not by any stretch of the imagination a "free market". Let me give you the straight poop from the perspective of an economist:

1. Overseas assets of oil companies are protected abroad by our military.
2. Products are transported using public roads, waterways, ports and other public resources.
3. Commodity trading is regulated by governments.
4. Public resources are required to clean up environmental damage from accidents (see Exxon Valdez).
5. Environmental damage from burning hydrocarbons is not reflected in the price. The "cost" of pollution is foisted upon everyone who breathes the noxious gases and particulates and by the environment that absorbs the rest of the gases and particulates.

The list goes on and on, but there is far more to the price of gas than what an oil company pays to extract it from the ground, transport it to a refinery, and then transport it to a gas station. The list above is just a small part of the other expenses associated with the extraction, production and transportation of a gallon of gas.

A true and accurate "free market" would incorporate these ancillary expenses into the price paid by the consumer, but alas we don't have anything approaching a free market anywhere on the planet - except of course for Ebay and Craigslist :)

[barryg]

How much tax did they collect for Uncle Sam in the last quarter?

[swall]

Must have been one of Al Gore's economists.

[Pat Carol]

I am very happy too hear that they made a huge profit. I think they should all go out and celebrate. Maybe go to a spa in the Bahama's, hit some gentlemen's club's, buy some high dollar liquor and bubbly and pick up some chick's.
Heck! the bank's and brokerage firm's are still whooping it up on our dime. I am so happy for them. They worked so hard to make such a mess. They need all the R & R they can get. No stress on taxpayer dollar's. Now that's the American way. :banghead :banghead :banghead :banghead :banghead :banghead
Who cares about the young men and women serving this country so proud in the military. They should be recieving a heck of a lot more for what they will be dealing with for the rest of their live's.
I'll shut-up before I get put in the doghouse. I am sorry if I have offended anyone.

Take Care & Ride Safe
Pat Carol

[seanoj]

Exxon Mobil profit margin is 16.08%. Apple Computer's margin is 19.32%.
Exxon Mobil year/year profit growth was 11.15% vs Apple's of 36.39%.

Exxo: 3rd Quarter 2008 earnings were 14.8bb but taxes paid 11.3bb. Ratio is 76 cents of taxes per dollar earned

Apple: 3rd Quarter 2008 earnings were 1.1bb but taxes paid 0.4bb. Ratio is 36 cents of taxes per dollar earned

You can't put your iPod in your BMW's tank and make it go...

[riderR1150GSAdv]

How much tax did they collect for Uncle Sam in the last quarter?

That will never be told by the alphabet soup media, but it is about 32 BILLION.
They also have untold Billions invested in infrastructure as in oilrigs, gas/oilpipelnes, refineries etc... I'd say they deserve a healty profit.

[r11rs94]

so for the last quarter exxon made a PROFIT of 14.8 billion
yet the execs are worried that next quarter wont be so good as price for oil is down adn demand is down
I feel real sorry for them , maybe we will have to bail them out next. sure they would do it for us

They also payed 29.2 BILLION in taxes or 43.3% of gross before taxes. Isn't that enough wealth to spread around???????? Thank God we can still make a profit in an American Co. :usa

[RJM2096]

Exxon (Mobil) is the biggest of the big so everyone will pick on them first. Unless something changes, I suspect their profits are going to tumble in the fourth quarter.

I think most American agree that profit is good, but we see over and over what happens when companies get so large that they can actually influence a market. The key is that we keep flexible enough to reduce our need for gasoline when they get out of line. What is really sad is that the oil companies in many cases are taking their extra profits and buying back their stock. So much for investing in alternative energy or drilling more on the land they already have leased. :usa

[ltljohn]

So they made a big profit. I say FANTASTIC!!!!! I have their stock in my retirement account. The big company is owned by many people it's not just a big faceless company. Remember that when you see the profits, your friends and neighbors are benefiting from that profit too.

[aaaaaa]

So they made a big profit. I say FANTASTIC!!!!! I have their stock in my retirement account. The big company is owned by many people it's not just a big faceless company. Remember that when you see the profits, your friends and neighbors are benefiting from that profit too.

That's right. Buy some stock and stop gripping about their profits.
robert

[Mika]

The gasoline market is not by any stretch of the imagination a "free market". Let me give you the straight poop from the perspective of an economist:

1. Overseas assets of oil companies are protected abroad by our military.
2. Products are transported using public roads, waterways, ports and other public resources.
3. Commodity trading is regulated by governments.
4. Public resources are required to clean up environmental damage from accidents (see Exxon Valdez).
5. Environmental damage from burning hydrocarbons is not reflected in the price. The "cost" of pollution is foisted upon everyone who breathes the noxious gases and particulates and by the environment that absorbs the rest of the gases and particulates.

The list goes on and on, but there is far more to the price of gas than what an oil company pays to extract it from the ground, transport it to a refinery, and then transport it to a gas station. The list above is just a small part of the other expenses associated with the extraction, production and transportation of a gallon of gas.

A true and accurate "free market" would incorporate these ancillary expenses into the price paid by the consumer, but alas we don't have anything approaching a free market anywhere on the planet - except of course for Ebay and Craigslist :)

A chance to ask an economist a question.

While I agree with your post overall the question is; is there a point when any market adjusts for all of the factors and constraints surrounding it and begins to act like a free market for practical purposes.

[hlothery]

Wonder what the cost is to construct and transport a new rig into the Gulf (Alaska or Mexico), start drilling, and start pumping oil?:scratch

[BeemerMike]

1. Overseas assets of oil companies are protected abroad by our military.

And they paid billions and billions of dollars in taxes to the U.S. government. I would think that falls under "provide for the common defence [sic]". Should the U.S. government and military NOT protect oversees assets of U.S. companies and citizens? See "Barbary Pirates".

2. Products are transported using public roads, waterways, ports and other public resources.

Paid for by the billions and billions of dollars that oil companies pay in taxes.

4. Public resources are required to clean up environmental damage from accidents (see Exxon Valdez).

Really? As far as I know we paid the entire cost of the clean-up and remediation of the Valdez oil spill, in addition to reimbursing people for losses, to the tune of BILLIONS of dollars. If you have any credible reference of any significant amounts to the contrary, please post it.

5. Environmental damage from burning hydrocarbons is not reflected in the price.

That "environmental damage" cost is also not reflected in the price of your BMW motorcycle, or your car, or your truck, or your furnace and/or air conditioner in you house, or your camp stove, or all the other things that actually BURN the hydrocarbons.

So why is the only solution to include this almost impossible to calculate cost in the price of the fuel? Oh, that's right, because it let's the government raise taxes on oil companies.

[Mika]

(snipped)
So why is the only solution to include this almost impossible to calculate cost in the price of the fuel?


Or to my question: At some point these costs define the landscape of the market and have been absorbed by the various sides in the transaction resulting in price and profit. So, at what point does the model transition back into a free market model from an economist's view?

[BeemerMike]

Or to my question: At some point these costs define the landscape of the market and have been absorbed by the various sides in the transaction resulting in price and profit. So, at what point does the model transition back into a free market model from an economist's view?

Well, THAT does not sound very "progressive" of you. ;)

[mrich12000]

The gasoline market is not by any stretch of the imagination a "free market". Let me give you the straight poop from the perspective of an economist:

1. Overseas assets of oil companies are protected abroad by our military.
2. Products are transported using public roads, waterways, ports and other public resources.
3. Commodity trading is regulated by governments.
4. Public resources are required to clean up environmental damage from accidents (see Exxon Valdez).
5. Environmental damage from burning hydrocarbons is not reflected in the price. The "cost" of pollution is foisted upon everyone who breathes the noxious gases and particulates and by the environment that absorbs the rest of the gases and particulates.

The list goes on and on, but there is far more to the price of gas than what an oil company pays to extract it from the ground, transport it to a refinery, and then transport it to a gas station. The list above is just a small part of the other expenses associated with the extraction, production and transportation of a gallon of gas.

A true and accurate "free market" would incorporate these ancillary expenses into the price paid by the consumer, but alas we don't have anything approaching a free market anywhere on the planet - except of course for Ebay and Craigslist :)


Just thank them for this economical swing we are experiencing now:scratch :dunno :usa :usa :usa :usa :usa :usa :usa :usa :usa :usa :lurk :banghead :banghead :banghead :banghead

Now go out there and Write That Letter of THANKS.

[Mika]

:rofl

I am never certain how to define a progressive. What ever the definition and resulting value system or the values placed on an element that makes up a market; I am still a realist and base my question on that.

Price and profit are a function of the market, even with constraints, of the parties agreeing on a value and managing the related expenses, risks and benefits to create a market.

More and more I am hearing or reading pundits of everything from pork bellies to the credit crisis say – ‘the market has corrected for that factor and now…’. I have experienced it anecdotally in my business life. I am really curious how to define that in a way to understand better if an observer is correct or full of ______

[GrafikFeat]

::::Sniff:::: ::::::Sniff::::: This ain't politiks?
What w/ an oil soaked administration and ties to enron? Puh Leeze...
This is clearly the result of Dick Cheney's "closed door" energy policy meetings.

We reap what we sew. Period.

[Mika]

No I don’t think its politics, its economics.

We reap what we sow as we participate and define markets as we participate in those markets.

We valued beef over poultry and defined the market for protein. We reaped more heart attacks in part as a result. The market change how it valued protein and redefined the balance between beef and poultry. Value judgments may define how you participate due to how you assess risks and benefits but the market itself balances out risks, benefits for the participants and defines price and profit in the process.

I am just curious how we define when any market has absorbed major changes and returns to a free market for practical day to day purposes.

[BeemerMike]

Just thank them for this economical swing we are experiencing now.


So, the oil companies are responsible for the sub-prime mortgage meltdown and the credit crisis and the stock market collapse? Wow . . . how do you get to THAT conclusion?! :confused:

[BeemerMike]

This is clearly the result of Dick Cheney's "closed door" energy policy meetings.

What is the result? :confused:

[PGlaves]

I just read today that Exxon Mobil has underfunded its pension fund obligations by $1,400,000,000 ($1.4 billion). But I do suspect that little problem can be taken care of quite quickly by them. Not so with many other companies - required to do so or not.

[BeemerMike]

I just read today that Exxon Mobil has underfunded its pension fund obligations by $1,400,000,000 ($1.4 billion). But I do suspect that little problem can be taken care of quite quickly by them. Not so with many other companies - required to do so or not.

I think that is a technical problem due to an accounting rule change, which will be corrected. Nobody here is worried about it.

Do you have a reference or citation (can't be too careful these days)?

[PGlaves]

I think that is a technical problem due to an accounting rule change, which will be corrected. Nobody here is worried about it.

Do you have a reference or citation (can't be too careful these days)?

Here is where I got the information.

http://www.time.com/time/business/article/0,8599,1855076,00.html?xid=rss-topstories

[BeemerMike]

Paul,

Here is another article, with a little more detail. Like I said, no one here is worried.

http://www.pionline.com/apps/pbcs.dll/article?AID=/20080804/PRINTSUB/909704091/1020/TOC

[PGlaves]

Paul,

Here is another article, with a little more detail. Like I said, no one here is worried.

http://www.pionline.com/apps/pbcs.dll/article?AID=/20080804/PRINTSUB/909704091/1020/TOC

Mike,

I'm not picking on ExMo. My larger concern is:

Here is a quote from the article you referenced.

“We fully intend to operate our business to enable us to pay all our pension promises,” Mr. Welberry said. Exxon Mobil has — and has had for almost 90 years — an AAA bond rating, he added.

My larger concern is that the folks at GM said the same thing for years. And I'm hearing the same rosy thing from my plan.

At this moment I'm not concerned personally, but also at this moment in economic times, I really want more candor and truth from everybody about the dismal state of our economy. And that comment is a general comment - not directed at Mr. Welberry at ExMo. What else could he be expected to say.

[BeemerMike]

I'm not picking on ExMo.

Paul,

I know you're not picking on anyone. Just letting you know we have discussed this internally, and employees are not concerned about this (well, maybe a few). We don't think XOM employees have the same risks as GM employees. But, maybe we're just biased. It's Exxon, not Enron. We have real, hard assets on (and in) the ground, not just in our computer databases. We kind of look at it this way, where that "fully-funded" pension money actually is may be LESS safe than if it just stayed in the Corporation.

Hopefully, our glasses are not too rose-colored.

[PGlaves]

Paul,

We kind of look at it this way, where that "fully-funded" pension money actually is may be LESS safe than if it just stayed in the Corporation.


I think I would agree with that :)

[xp8103]

Who decides what is fair or unfair when it comes to a companies profits? Something tells me that if you had a business and was told that you make too much money and need to shut down or pay more taxes than your competitors, just to make it "fair", perhaps one might see it a bit differently.

Well, it's looking like in about 4 days the answer to your question will be the federal government. :uhoh

[xp8103]

Exxon Mobil profit margin is 16.08%. Apple Computer's margin is 19.32%.
Exxon Mobil year/year profit growth was 11.15% vs Apple's of 36.39%.

Exxo: 3rd Quarter 2008 earnings were 14.8bb but taxes paid 11.3bb. Ratio is 76 cents of taxes per dollar earned

Apple: 3rd Quarter 2008 earnings were 1.1bb but taxes paid 0.4bb. Ratio is 36 cents of taxes per dollar earned

You can't put your iPod in your BMW's tank and make it go...

Sean,
Please don't ruin the discussion by introducing facts into it!! :)

[OfficerImpersonator]

I think it's important to note for the benefit of those without a degree in finance or economics that profit is what is left after all the bills have been paid.

There is, in my opinion, a misconception among the average American as to what constitutes a profit. Profit doesn't pay the bills and other obligations. The bills have to be paid before a profit can be calculated.

Profit is simply money the company doesn't need to pay it's bills, and it doesn't make a difference to the day to day operations of the company if they make a million dollars or a hundred billion in profit.

Since we all buy gasoline, profit is simply a "tax" that's imposed by a company on consumers who have no choice but to pay the going rate. A given company COULD charge a whole lot less for it's product to limit the impact of high prices on consumers purchasing a necessity of life, but instead chooses not to.

As an aside, since I appear to have the ear of at least a couple of oil company employees, let me ask why haven't the oil companies constructed any new refineries over the past eight years? Why haven't they expanded their refining capacity AT ALL over the past eight years? I have my answer, but I'd like to hear yours.

Obviously, with the Bush Administration running the show, getting approval from the federal government for the construction and/or remodeling of refineries hasn't been an issue.

So why haven't the oil companies plowed their profits back into expanding refining capacity? Anyone who understands a simple supply and demand curve knows that as supply increases, the price decreases. Deliberate attempts to restrict supply increases the price, and I would categorize an outright refusal to expand refining capacity as an attempt to restrict the supply of refined petroleum products - and thus is an attempt to artificially retard natural market forces which seek to lower the price as supply increases to meet demand.

[Mika]

I am just guessing here that maybe someone in the oil companies made the most viable case that the risk that a company would not recover the cost of building and operating expenses and in turn yield a acceptable profit return over the life of the investment.

Because I or the demand side of the market may think it is a good idea (or not) to build oil refineries does not make it incumbent on companies to do so.

I’ll check back at a latter time for responses, I have to pick up the younger members of the pit crew so they can participate in the candy market.
:rofl

Happy Halloween

[OfficerImpersonator]

OfficerImpersonator

If you didn't live so far from your work you could cut down on Oil Company profits.

I can effect the same change through my democratic government as well.

[BeemerMike]

Profit is simply money the company doesn't need to pay it's bills, and it doesn't make a difference to the day to day operations of the company if they make a million dollars or a hundred billion in profit.

Spoken like a true non-capitalist.

As an aside, since I appear to have the ear of at least a couple of oil company employees, let me ask why haven't the oil companies constructed any new refineries over the past eight years?

Actually, there hasn't been a new refinery built in the U.S. since about 1973 (it is located in Joliet, IL). So, I guess you need to blame Ford, Carter, Reagan, Bush I, Clinton, and Bush II for that.

Why haven't they expanded their refining capacity AT ALL over the past eight years? I have my answer, but I'd like to hear yours.

Actually, refineries HAVE expanded their capacities over the past eight years. The largest refinery in the U.S. expanded capacity by about 15 to 20% over the past eight years. I believe Marathon is spending about $4 BILLION on a huge capacity expansion of its refinery in Louisiana (don't you see the commericials?). You can easily check this U.S. refining capacity expansion yourself through government, industry, and trade association published statistics. Of course, I know some of you won't believe those sources of information, and there is nothing I can do about that.

The simple answer for no new grassroots refineries is that the long-term supply and demand (and therefore profit) forecasts do not provide sufficient justification for the risk of spending the huge amount of capital required to build a new refinery. Refinery economic decisions (build, expand, etc.) are based on 10, 20, and 30-year outlooks, not what the price of gasoline is today or this year. However, increasing capacity by expanding existing refineries does meet the internal economics analysis tests, so that is the path chosen by the oil companies for the U.S. And there are also environmental and NIMBY obstacles to build new vs. expand existing in the U.S.

[BeemerMike]

I can effect the same change through my democratic government as well.

:rolleyes Oh yeah, taking the profit-motive out of it will really help supply and price!

[GrafikFeat]

However, increasing capacity by expanding existing refineries does meet the internal economics analysis tests,
so that is the path chosen by the oil companies for the U.S. And there are also environmental and
NIMBY obstacles to build new vs. expand existing in the U.S.

Here's an idea... "Use Less."
Unfortunately others think differently:
"Conservation may be a sign of personal virtue but it is not a sufficient basis for a sound, comprehensive energy policy."
Dick Cheney –April 30, 2001

[RJM2096]

So, the oil companies are responsible for the sub-prime mortgage meltdown and the credit crisis and the stock market collapse? Wow . . . how do you get to THAT conclusion?! :confused:

While we cannot blame the oil companies for our over indulgence in borrowing up to the hilt, there is no doubt the price of energy was the catalyst breaking down our house of cards. We lost confidence in the future and started back-peddling. Now that the price of engery is dropping we may see a recovery next year.

[BeemerMike]

While we cannot blame the oil companies for our over indulgence in borrowing up to the hilt, there is no doubt the price of energy was the catalyst breaking down our house of cards.

:rolleyes Even IF this was true (and the history clearly shows the "house of cards" was starting to come down way before the price of oil starting going up), you would think the principal inquiry would be WHY we built the house of cards in the first place (i.e., why, beginning in the mid-to-late 1990's, were we pressuring/encouraging lending institutions to make home loans to people who did not meet lending qualifications, and loans on little/no down payment with no income verification), and WHO was behind the "house of cards" construction plan, so we don't repeat these mistakes in the future? I'll stop here, because any more starts to get political . . . and we know what happens then.

[BeemerMike]

Here's an idea... "Use Less."
Unfortunately others think differently:
"Conservation may be a sign of personal virtue but it is not a sufficient basis for a sound, comprehensive energy policy."
Dick Cheney –April 30, 2001

Yes, conservation ("use less") is certainly PART of the solution . . . it is just not reasonable for that to be the ENTIRE solution . . . which is what Cheney was talking about in 2001.

But, of course, you already knew that. :rolleyes

[milo]

I think it's important to note for the benefit of those without a degree in finance or economics that profit is what is left after all the bills have been paid.

There is, in my opinion, a misconception among the average American as to what constitutes a profit. Profit doesn't pay the bills and other obligations. The bills have to be paid before a profit can be calculated.

Profit is simply money the company doesn't need to pay it's bills, and it doesn't make a difference to the day to day operations of the company if they make a million dollars or a hundred billion in profit.



Profit is the money remaining after all expenses. But then there's tax which is paid on the profits. Then the Government takes about 70% of the profit for themselves, in the form of tax. Of the remaining, dividends are distributed to stockholders. That dividend income goes on those stockholder's income tax forms and is then taxed as well. The "double tax". Our government, and those that love big government, should *love* Exxon's profits.

[PGlaves]

Profit is the money remaining after all expenses. But then there's tax which is paid on the profits. Then the Government takes about 70% of the profit for themselves, in the form of tax. Of the remaining, dividends are distributed to stockholders. That dividend income goes on those stockholder's income tax forms and is then taxed as well. The "double tax". Our government, and those that love big government, should *love* Exxon's profits.

I understand the sentiment - but a fact or two might be helpful, since the maximum Corporate Income Tax rate in the U.S. is 35%, this 70% scenario only overstates the tax liability by double.

[RJM2096]

:rolleyes Even IF this was true (and the history clearly shows the "house of cards" was starting to come down way before the price of oil starting going up), you would think the principal inquiry would be WHY we built the house of cards in the first place (i.e., why, beginning in the mid-to-late 1990's, were we pressuring/encouraging lending institutions to make home loans to people who did not meet lending qualifications, and loans on little/no down payment with no income verification), and WHO was behind the "house of cards" construction plan, so we don't repeat these mistakes in the future? I'll stop here, because any more starts to get political . . . and we know what happens then.

I agree 100%. We are idiots for living a lifestyle with 5 credit cards at $10,000 each while making mnimum payments and buying expensive homes to the benefit of the developers. We are living in a society where the new marketing used is mostly misleading if not fraud. I am looking at the new reverse mortgages being marketed and I see the next major economic flop. The banks want us to go to our graves broke, paying our medical bills with our home equity. What a legacy to leave our children.

[OfficerImpersonator]

:rolleyes Oh yeah, taking the profit-motive out of it will really help supply and price!

I simply draw a distinction between a reasonable profit and an unreasonable profit. 60 billion a year is, in my opinion, an unreasonable amount of profit.

Never once have I suggested we take the profit motive out of the equation. I only suggest that 15 billion a quarter is a bit excessive considering the state of our economy.

[OfficerImpersonator]

Profit is the money remaining after all expenses. But then there's tax which is paid on the profits. Then the Government takes about 70% of the profit for themselves, in the form of tax. Of the remaining, dividends are distributed to stockholders. That dividend income goes on those stockholder's income tax forms and is then taxed as well. The "double tax". Our government, and those that love big government, should *love* Exxon's profits.

Please cite the source of your information that corporations pay 70% of their profit in taxes. I don't think that statistic passes the smell test.

Your statement also excludes tax credits, shelters and dodges corporations use to avoid paying taxes.

Furthermore, I'll contend that Exxon (and every other corporation) simply passes the tax bill on to their consumers so as to not jeopardize their precious profits, which of course are used to calculate executive bonus programs.

[r11rs94]

Please cite the source of your information that corporations pay 70% of their profit in taxes. I don't think that statistic passes the smell test.

Your statement also excludes tax credits, shelters and dodges corporations use to avoid paying taxes.

Furthermore, I'll contend that Exxon (and every other corporation) simply passes the tax bill on to their consumers so as to not jeopardize their precious profits, which of course are used to calculate executive bonus programs.

I'll say it again, they paid 29.2 Billion in taxes, double thier profit. on approx 130 billion or approx 40%. After expensives, there rate of profit is much lower than many other companys like Wal-Mart, GE etc. It just so much because of the volume that they sell. You also have other choices. Use Citgo and help support our friends in South America. At least Exxon provides something to its customers, unlike the government who just pisses it away. IMHO that is.

[adamceckhardt]

When I was in the car business, I'd often field the complaint that we made too much money. When put into a simple percentage, we rarely grossed more than 7-8%. When you're talking net, it gets closer to 2-3%.

If you don't like the fact that a business makes a profit, don't buy their stuff. Plain and simple.

Like other people have mentioned here, it took quite a few people and endless piles of machinery to get to where they are now.

Profit is fine by me- we all survive off of it in one way or another.

[PGlaves]

Profit is fine by me- we all survive off of it in one way or another.

Now we're getting awful close to talking about religion :)

[milo]

I understand the sentiment - but a fact or two might be helpful, since the maximum Corporate Income Tax rate in the U.S. is 35%, this 70% scenario only overstates the tax liability by double.

I believe you're referring to the maximum *federal* corporate tax rate. Don't forget the state and local taxes.

[xp8103]

I simply draw a distinction between a reasonable profit and an unreasonable profit. 60 billion a year is, in my opinion, an unreasonable amount of profit.

Never once have I suggested we take the profit motive out of the equation. I only suggest that 15 billion a quarter is a bit excessive considering the state of our economy.

With all due respect, who are you to dictate what is excessive? That's awful "From each according to his ability to each...." So many like to bilge about the dollar amount because it SOUNDS excessive. But what is IGNORED and what has been explained here at least twice is that the MARGIN that they earn is NOT excessive. A capitalist would say it is ok for a company to earn 7 or 8% profit. A capitalist would say that they would wish for a HIGHER margin. A socialist would say that that $60B is excessive and the government should place a restriction on how much a company can earn. A socialist would say that a company earning that much money should pay a tax on excessive profit (windfall profits tax) because 7 or 8% for Exxon is apparently excessive. It is the same excuse that is given for tax cuts being "unfair".
We were told that a large percentage of the run up in oil prices last summer was due to the burgeoning demand in places like China and India with their growing economies. Who do you suppose sells oil to places like China and India? Why Exxon of course. And as long as those places continue to increase the amount of oil they use, companies like Exxon will continue to make large amounts of money even tho their profit margin will change little.

[BeemerMike]

OK, so we can at least discuss this from a common set of numbers, here they are:

http://www.exxonmobil.com/Corporate/Files/news_release_earnings3q08.pdf

Items to note:

3Q08

Total revenue and other income - $137.7 Billion (2008 YTD = $392.7 Billion)
Total income BEFORE income taxes - $26.2 Billion (2008 YTD = $68.6 Billion)
Income taxes - $11.3 Billion (2008 YTD = $31.2 Billion)
Net income (after taxes) - $14.8 Billion (2008 YTD = $37.4 Billion)

Total all taxes (income, sales-based, and other) - $32.5 Billion (2008 YTD = $94.2 Billion)
Total capital expenditures - $6.9 Billion (2008 YTD = $19.3 Billion)

Quick analysis:

Net income as percent of total revenues - 10.7% (2008 YTD = 9.5%)
ExxonMobil paid income tax of 43% of its before tax income
ExxonMobil's total taxes paid were more than two times its net income
Amounts paid to shareholders (dividends and stock repurchase) - $10.1 Billion

I never ceased to be amazed that some people object to a U.S. corporation making a 10% profit margin (without really thinking about what actually happens to the profit and the $138 billion in revenues), but they have no apparent problem with the U.S. government taking about 18 to 19% of U.S. GDP in total federal taxes.

Finally, note that most of ExxonMobil's activity, revenue, and income comes from OUTSIDE the U.S. If the next administration decides to increase the federal tax burden on international companies such as ExxonMobil, what do you think the impact will be on their U.S. activities (including U.S. jobs)? Does anyone want to argue that it will INCREASE U.S. activity, revenues, and jobs?

[xp8103]

Does anyone want to argue that it will INCREASE U.S. activity, revenues, and jobs?

Some will Mike. Some will.

[BeemerMike]

Some will Mike. Some will.

Well, of course . . . they are doing it now. They just cannot put forth a credible, economically-sound logic for WHY this would happen.

[Mika]

A very crude quote attributed to Einstein by most: The most powerful force in the universe is compound interest.

The interest that is compounded by a company such as Exxon is the time in the market, past expenditures to develop their position in the market and skills to efficiently produce and deliver a product those which in profit. In this case a profit that is defined by a really big number.

Is it a fair profit?

That is for the owners, in the case of a publicly held company the share holders to decide. That decision will be made on their goals, their perception of a developing market or a mature market and will result in what they think is a fair or appropriate amount that they can reap the returns of.

For non owning private citizens to get all heated up about company that is able to maximize these elements is to engage in public buyer’s remorse that blames the company for their mistakes when they participated in the market place.

[xp8103]

Well, of course . . . they are doing it now. They just cannot put forth a credible, economically-sound logic for WHY this would happen.

Well, we'd need to get into a political discussion to debate that unfortunately.

[BeemerMike]

Well, we'd need to get into a political discussion to debate that unfortunately.

I respectfully disagree. We can (or should be able to) discuss the "economics" case for why (or why not) increasing the U.S. tax burden on companies and businesses will increase their U.S. activities and the U.S. economy without getting into politics.

The political discussion occurs when one cannot make the economics case that increasing the U.S. tax burden will increase the U.S. activities of companies and businesses or the U.S. economy, but one asserts we should increase the U.S. tax burden anyway.

The discussion usually quickly runs the economics case and the political case together, as if they are the same (they are not) with ambiguous statements about societal benefits and investing in the new future. That's when the discussion deteriorates.

[xp8103]

I think the problem comes when the justification for the economic practices start.

In the case of ExxonMobile, the problem arises not when same makes a profit but when someone decides that its profit is "excessive" simply because the absolute dollar amount is large and then determines what should be done with that profit and who should make those decisions.

In a capitalist economy the money is reinvested in some way to grow the business; there isn't one business that doesn't want to grow and become more profitable because business growth and profits means increased employment and growth and profits(a rising tide raises all ships).

In a non-capitalist economy, the "excessive" amount is confiscated by some ruling authority which then decides what should be done with it.
In a capitalist economy, the ruling authority implements practices that set the environment where a company can do more (employ, produce, profit, repeat).

In a socialist economy, the ruling authority implements practices that remove the profit from the equation for future redistribution.

The quote I heard recently was that the socialist knows how to redistribute wealth but not how to create it. That is a major reason for the collapse of the Soviet Union. The government was the sole "wealth creator" and simply couldn't sustain itself.

And we all know the first rule of capitalism: Government doesn't CREATE wealth, it REDISTRIBUTES it.

[BeemerMike]

Well, now we are starting to get "political", so I'll demur. I'll just stick to the economics discussion about how increasing the U.S. tax burden can be good for business and the U.S. economy.

[xp8103]

Well, now we are starting to get "political", so I'll demur. I'll just stick to the economics discussion about how increasing the U.S. tax burden can be good for business and the U.S. economy.

Lol... OK, I'll shut up and wait for someone to answer your question.

[Mika]

I respectfully disagree. We can (or should be able to) discuss the "economics" case for why (or why not) increasing the U.S. tax burden on companies and businesses will increase their U.S. activities and the U.S. economy without getting into politics.

The political discussion occurs when one cannot make the economics case that increasing the U.S. tax burden will increase the U.S. activities of companies and businesses or the U.S. economy, but one asserts we should increase the U.S. tax burden anyway.

The discussion usually quickly runs the economics case and the political case together, as if they are the same (they are not) with ambiguous statements about societal benefits and investing in the new future. That's when the discussion deteriorates.


I respectfully agree, for the most part. :ha

For me the underlying discussion is the economic one. It is one of business and markets. Is there a market demand for a product and a business or businesses that feel they can make a living making that product and meeting the demand?

Related political discussions have at least two basic forms for me.

The first revolves around the market itself in terms that include how the market is run and regulated. Is it run and regulated in a way that allows demand to be met with supply and allows the market to continue without killing the buyers or the possibility of companies to provide the product wanted.

The second political discussion we get into, and from my view both sides deal with poorly is the economic and social engineering of taxation and market structure. Would be reformers see targets of opportunity in profits such as this, attack to get a chunk of them without making a viable case for the underlying issue they are championing. Companies rightly and tenaciously defend their position and profit. What to often I miss is an understanding of how the company views the best way to protect the underlying market and their participation in it while dealing with the political and social issues that exist in the geopolitical region that defines the market.

[RJM2096]

I just wish they spent more on captial development and exploration and less on buying back their own stock. If they bought back 2% each year for ten years given that the Exxon executive already own about 2% of the company Exxon will be a little less than a real public company.

Capital and exploration expenditures were $6.9 billion, up 26% from the third quarter of2007.

Share purchases of $8.0 billion reduced shares outstanding by 2.1%.

[Mika]

I just wish they spent more on captial development and exploration and less on buying back their own stock. If they bought back 2% each year for ten years given that the Exxon executive already own about 2% of the company Exxon will be a little less than a real public company.

Capital and exploration expenditures were $6.9 billion, up 26% from the third quarter of2007.

Share purchases of $8.0 billion reduced shares outstanding by 2.1%.

Why?

The internal argument for what is best for a company would include discussions of which is best for the long term survival of the company, in this case exploration expenditures v the best level of stock dilution, wouldn’t it? In the case you describe the company came to the conclusion that for the company a stock buy back was better.

If exploration and development of those resources is desirable to someone outside the company they have to make a case for the merits of it that is better.

[xp8103]

I think that the amount (both real and as a percentage) that they spend on both new exploration and increasing efficiencies would astound and amaze.

[BeemerMike]

I just wish they spent more on captial development and exploration and less on buying back their own stock.

ExxonMobil has spent $19.3 Billion on capital expenditures YTD2008, an increase of 31% from 2007. That seems like a pretty healthy increase. The corporation can only manage so many projects at a time.

Also, each capital expenditure project must meet economics justification to be approved. Unlike the government spending money on things that sound good, companies like ExxonMobil have to actually make a profit at the end of the day.

As for stock repurchase, when the stock price is down it seems like a good economic decision to put the corporate money there, especially if there are not available projects that look better. When the stock price goes back up (and with a conservatively managed company like ExxonMobil, it will), it will provide a source of capital for future projects, if needed. Otherwise, the stock repurchase benefits the shareholders.

[GrafikFeat]

ExxonMobil has spent $19.3 Billion on capital expenditures YTD2008, an increase of 31% from 2007. That seems like a pretty healthy increase. The corporation can only manage so many projects at a time.

Yeah, like spending 15 years fighting the EXXON Valdez decision in AK for a measly five billion payout to all the people who lost their livelihoods due directly to the spill. :hungover

You are right... The scope does amaze. :scratch

[BeemerMike]

Yeah, like spending 15 years fighting the EXXON Valdez decision in AK for a measly five billion payout to all the people who lost their livelihoods due directly to the spill. :hungover

ExxonMobil paid the COMPENSATORY damages (i.e., "loss of livelihood") long ago. The legal argument was about the PUNITIVE damages. Granted, some people were hoping to get two (or three, or four, or more) bites out of the same apple.

[nortonrt]

Carrying the What’s a Fair Profit? argument to it’s logical conclusion, shouldn’t we also consider what would be the range of fair compensation for work of different sorts, what size house and how much land, how many children ought to be allowed, how many cars and/or motorcycles, etc., would it be fair to own. How would such a delimiting determination be arrived at – fairly, I mean? Which branch of government is best suited to make such determinations: executive, legislative, or judicial? Would that be a federal or state purview? In the end, I suppose, it’s a question of how do we do away with market forces, or, put another way, how can we subvert the incentive impulse to make things more “fair?” I suppose we’ll find out after tomorrow’s election.

[pffog]

I have read, but not confirmed that they only made a profit of about 4 cents/gallon profit, so even if they sold at cost, it would not help the average person.

HOWEVER, the government profited over $50 BILLION, from fuel sales last year!!!

http://www.taxfoundation.org/publications/show/1139.html

I do however feel the CEO's 15 million a year needs to be taxed more.

We should promote business by having low corporate tax rates, but individual tax rates should return to their former rate.

[BeemerMike]

We should promote business by having low corporate tax rates, but individual tax rates should return to their former rate.

Why should individual tax rates return to their former rate? What do you think is a "fair" maximum incremental tax rate that an individual should pay?

What about non-corporate businesses (e.g., small businesses) that pay federal income taxes at the individual tax rates?

How much of the total U.S. economy (GDP) do you think should be collected in federal taxes (it is currently about 18 to 19%)?

Just curious . . .

[roc_doc]

Don't have much time for forums, but this topic caught my eye. A fairly civil discourse, too - I'm impressed.

Just wanted to note that while oil companies have an inventory of undrilled acreage this, by no means guarantees success at the drill bit. And if common sense doesn't prevail, then just trust me, really good prospects don't go undrilled for long; it's the riskiest and costliest ones that that don't pass budget hurdles.

Lastly, given the exposure to monetary loss in an extremely risky bussiness, I think oil companies deserve their profits.

[xp8103]

And for those of you who think that you're not paying enough already, have you written a check to the federal government for more? Did you refuse your stimulus check last summer? Did you send back your federal tax return check?

I believe that, rather than increase the tax rates on business and individuals of a certain bracket, the federal government should set up an account in the treasury, perhaps with a paypal account, to allow anyone who feels that they haven't paid enough, those that somehow feel undertaxed to send in more.

[pffog]

Why should individual tax rates return to their former rate? What do you think is a "fair" maximum incremental tax rate that an individual should pay?

What about non-corporate businesses (e.g., small businesses) that pay federal income taxes at the individual tax rates?

How much of the total U.S. economy (GDP) do you think should be collected in federal taxes (it is currently about 18 to 19%)?

Just curious . . .

Well first we MUST get the government in line and stop the deficit spending, when/if this country fails it will be due to economic collapse, which some may argue already is at our doorstep.

Next we must stop the stupid mandates that cost society trillions every year.

I am not an expert, but of all the tax schemes I lean toward the flat tax, everyone pays the same % of there personal income, with only a few deductions to help those that are truly struggling. I will be the first to admit that I haven't researched all pluses and negatives.

This would let us get ride of the 66,000 pages of tax code :banghead and most of the IRS. Corporate rates could be separate, with deductions for keeping not only keeping local jobs, but using Domestic suppliers for materials and goods.

We can't survive on service industries alone, we need a strong manufacturing base and unfortunately we have destroyed most of that.

I do however, not have a real issue with higher rates for the wealthy, and corporations, after all they more then likely benefit/profit more from infrastructure and other tax supported institutions.

We all pay too much, and the government has been very irresponsible with OUR $$$.

[BeemerMike]

We all pay too much, and the government has been very irresponsible with OUR $$$.

Well, you really did not answer any of the questions I posed to you, but OK.

[rbertalotto]

A couple of points.....

Massachusetts has a place on the Tax forms for "voluntary contributions". All the Democratic Obama folks that want higher taxes could check this box and make a donation. Not one Democratic politician has elected to make said contribution. Not one!

as far as US oil companies drilling anywhere............forgetaboutit.........Why in the world would you spend hundreds of millions of dollars finding a resource that the government is trying to get consumers to use less........Why would you increase supply when there is plenty of oil and the prices are dropping like a rock? The only reason would be for self preservation of the USA and not relying on foreign sources. Ain't going to happen.........It would bankrupt the US oil companies..........The federal government would need to nationalize the oil companies for this to happen. (on second thought, if Palosi and Obama get there way, that's just what will happen.....)

[RJM2096]

I love the BMWMOA forums because I feel like I learn from others. Ya know, I don't really feel like we are learning anything from this thread.

http://i259.photobucket.com/albums/hh310/RJM2096/LearningNOT.jpg

[BeemerMike]

as far as US oil companies drilling anywhere ............ forgetaboutit ......... Why in the world would you spend hundreds of millions of dollars finding a resource that the government is trying to get consumers to use less........Why would you increase supply when there is plenty of oil and the prices are dropping like a rock? The only reason would be for self preservation of the USA and not relying on foreign sources. Ain't going to happen.........It would bankrupt the US oil companies..........The federal government would need to nationalize the oil companies for this to happen. (on second thought, if Palosi and Obama get there way, that's just what will happen.....)

Actually, not the only reason. First, oil companies have to find NEW sources of crude oil to replace older fields as they "dry up". The oil business (at least as practiced by the major oil companies) is a very long-range business. Investment and exploration decisions are not based on what oil prices are today, or projected to be next month. They are based on long-range supply/demand/price forecasts, with a heavier weighting on the near-term (5 to 10 years), of course. Second, oil companies prefer to have their crude supplies come from politically stable areas, since it reduces risk of supply disruptions and price fluctuations. Foreign sources are OK, as long as it is the "right" foreign sources (e.g., Canada).

[1flyer]

I love the BMWMOA forums because I feel like I learn from others. Ya know, I don't really feel like we are learning anything from this thread.



Oh really? I think Mike is doing an excellent job fielding the questions and providing good information on both the financial side and the supply side of the oil business. I'll listen to someone that has a good working knowledge of a business much more than I will listen to someone just ranting and raving about something they don't know anything about except that they don't like it.

Thanks Mike, I've enjoyed your post.

[RJM2096]

Oh really? I think Mike is doing an excellent job fielding the questions and providing good information on both the financial side and the supply side of the oil business. I'll listen to someone that has a good working knowledge of a business much more than I will listen to someone just ranting and raving about something they don't know anything about except that they don't like it.

Thanks Mike, I've enjoyed your post.

I agree Mike is knowledgable and he does not rant, but discussing the oil industry is getting old. We went thought this when gas was $4.20 a gallon. No new knowledge. You have one group that thinks the oil companies are crooks and another that thinks the oil industry represents what America is all about. It is kind of like who is better McCain or Obama. :buds

[pffog]

Well, you really did not answer any of the questions I posed to you, but OK.


It would be pretty presumptuous of me to be specific in answering the questions you posed. I will throw it back, what values would you assign to those questions??

Although there is a lot of information available , there is a lot of mis-information also and being an analytical type, there are way too many things to consider before you put a hard number on anything without considering so many things things that no one person could possibly be aware of, let alone comprehend.

My big problem is the incomprehensible waste of our tax dollars and the stupid mandates and restrictive regulations that cost additional $$$ for businesses and individuals.

[xp8103]

pffog,

Here's a simple question for you to answer.

Disregarding the fact that the federal government DOES have to collect taxes for those things outlined in the Constitution (promoting the general welfare and quartering an army), who do you think would do a better job at deciding what to do with your tax money, you or the federal government?

[BeemerMike]

It would be pretty presumptuous of me to be specific in answering the questions you posed. I will throw it back, what values would you assign to those questions??

Sorry, I didn't mean to be presumptuous. However, it is your stated position that individual rates should return to the previous levels (without saying why or what), so I was just curious what you thought the maximum incremental tax rate should be for individuals. The maximum rate used to be more than 50% (at one time I believe it was 90%), so just curious where along that seriatum you thought was "fair" for higher income earners.

And, you thought we should promote business by having low corporate tax rates (I agree), but non-corporate businesses (e.g., small businesses) are subject to the individual tax rates, so I was curious about how you thought this should be handled. Otherwise, we would end up with low corporate business tax rates and high non-corporate business tax rates.

My bad.

[BeemerMike]

but discussing the oil industry is getting old.

Well, the thread IS entitled "Exxon makes 14.8 billion"! ;)

[GrafikFeat]

I love the BMWMOA forums because I feel like I learn from others. Ya know, I don't really feel like we are learning anything from this thread.

http://i259.photobucket.com/albums/hh310/RJM2096/LearningNOT.jpg

IMHO, seems we haven't learned anything from religion(s) over the millennia either. :brow
(Since you decided to add that to the mix.)

[pffog]

pffog,

Here's a simple question for you to answer.

Disregarding the fact that the federal government DOES have to collect taxes for those things outlined in the Constitution (promoting the general welfare and quartering an army), who do you think would do a better job at deciding what to do with your tax money, you or the federal government?

I know we need taxes, but being frugal, I believe that the government should spend every dollar as carefully as I would.

As I reside in a very small piece of this nation, I think there are a lot of things that I could not possibly be aware of, and so the Federal Government has a "bigger picture" view of what programs/projects need funding for the good of all.

I also believe that there is a LOT of things that are better handled, on a state and local level for the same reason. That is, that someone thousands of miles away cannot possibly know what is going on in every locality in the country.

So to answer your question, yes the Feds can do better in SOME cases, but not in all. Some is better handled locally, but not all.

Like life, it is a balancing act, to much centralization serves no one well.

[pffog]

And, you thought we should promote business by having low corporate tax rates (I agree), but non-corporate businesses (e.g., small businesses) are subject to the individual tax rates, so I was curious about how you thought this should be handled. Otherwise, we would end up with low corporate business tax rates and high non-corporate business tax rates.

My bad.

In my mind I alluded to an answer with the reference to the 66,000 pages of tax code, that only seem to confuse and not clarify how taxes are levied, would be scrapped and some new simpler definitions would be established that would change the corporate, non-corporate inequities. (Maybe I would make a good politician with my non-specifc answers)

I think we are on the same page for the most part, My preference would be to LOWER everyones tax burden, but we cannot just keep passing our fiscal irresponsibility to future generations.

[OfficerImpersonator]

Mike,

How about we scrap the convoluted tax code as it applies to businesses and prohibit deductions for depreciation, capital expenditures, etc. and revert to a simple progressive income tax where the more the company makes in profit the more it pays in taxes?

The problem with the tax code is while corporations pay a nominal tax rate (what, 40% in Exxon's case?) they whittle that figure down to almost nothing with all the deductions. Just think how much Exxon would save in accounting costs!

Applying the same structure to individuals is tempting, but I'd sure miss my mortgage interest and dependent child deductions :)

[BeemerMike]

How about we scrap the convoluted tax code as it applies to businesses and prohibit deductions for depreciation, capital expenditures, etc. and revert to a simple progressive income tax where the more the company makes in profit the more it pays in taxes?

Or, we could just eliminate corporate INCOME taxes completely (so that business decisions are based on profit and not also tax consequences), and instead tax the income of individuals when those BIGGER profits are transferred to individuals in the form of dividends, stock appreciation gains, and employee salaries and bonuses. That would make it simpler. ;)

The problem with the tax code is while corporations pay a nominal tax rate (what, 40% in Exxon's case?) they whittle that figure down to almost nothing with all the deductions. Just think how much Exxon would save in accounting costs!

YTD2008, ExxonMobil has paid $31.2 Billion in income taxes on $68.6 Billion in income before income taxes (sounds like about 45% or so), and has paid $94.2 Billion in all taxes on total revenues of $392.7 Billion (or about 24%), so I'm not really sure that qualifies as "whittle that figure down to almost nothing". Think about that for a minute . . . about 1/4 of the total revenues (not income, but revenues) that come into the corporation go back out as taxes to some government entity (although not all are income taxes)!

Applying the same structure to individuals is tempting, but I'd sure miss my mortgage interest and dependent child deductions :)

Not if your tax RATE was lower.

[OfficerImpersonator]

So how do we eliminate the corporate income tax, reduce individual tax rates, and still pay back our $10 trillion national debt?

If you mention anything remotely resembling support for or defense of "trickle down economics", I'm going to :sick

[James.A]

Churchill once said;" democratic capitalism is the worst form of government, except for all the others." I agree with this concept. Going forward, we will have an opportunity to see the future of capitalism, in the social democratic model.

[BeemerMike]

So how do we eliminate the corporate income tax, reduce individual tax rates, and still pay back our $10 trillion national debt?

Read closer. You tax the "corporate income" when it is distributed to individuals in the form of larger dividends to shareholders, realized stock appreciation gains, and employee salaries, wages, benefits and bonuses (i.e., more employees and/or higher salaries, wages, etc.). The "income" still gets taxed, but with less distortion on the business decisions of the company.

As for reducing the national debt, I guess you overlooked the option of the government spending less in the future. ;)

[BeemerMike]

the future of capitalism, in the social democratic model.

Wow . . . nice euphemism. ;)

[xp8103]

So how do we eliminate the corporate income tax, reduce individual tax rates, and still pay back our $10 trillion national debt?

If you mention anything remotely resembling support for or defense of "trickle down economics", I'm going to :sick

Decreasing the amount of money the federal government takes in does not create a deficit. Spending more does. Sounds like pretty simple math to me.

As for your other statement, who do you think creates jobs in this country?

[BeemerMike]

As for your other statement, who do you think creates jobs in this country?

Not sure I understand your question. Can you restate?

[xp8103]

Not sure I understand your question. Can you restate?

It was in response to OfficeImpersonator's statement about trickle-down economics.

[BeemerMike]

Decreasing the amount of money the federal government takes in does not create a deficit. Spending more does. Sounds like pretty simple math to me.

Really?! If you take in less revenue (taxes) but continue to spend the same amount, then you will increase the deficit. How can it be anything else?

If you spend more, but leave revenues (taxes) the same, you will increase the deficit. If you spend less, but leave revenues (taxes) the same, you will decrease the deficit.

Don't confuse tax RATES with tax RECEIPTS.

The overarching issue is how much should the federal government take out of society and the economy in taxes and how much should the federal government spend (and on what) . . . but that, of course, is political, so we won't go there.

[BeemerMike]

It was in response to OfficeImpersonator's statement about trickle-down economics.

Sorry, I mixed up the posts.

[xp8103]

Mike,
It doesn't sound like you missed my point but maybe?

My point was that government taxation doesn't create a deficit, government spending does. My implication is that the government is spending too much. Kennedy, Reagan, Bush 43, and governors like Bill Richardson D-NM (to cite a current example) have proven that cutting taxes leads to increased revenue. Bush 43 cut taxes and the federal treasury saw record revenues. The problem Washington DC has is not a revenue problem, it's a spending problem.

[BeemerMike]

It doesn't sound like you missed my point but maybe?

Yes, I got the posts mixed up, but like I said we're getting into a "political" discussion that goes beyond just economics, so I'll stop.

[BeemerMike]

But is it a political discussion or not? I would say it is not until you bring party dogma into the discussion. The issue that needs to be discussed is governance not party dogma debates.

It should not be, but I doubt we can have much of a discussion here about how much the government should take (and from whom) and how much the government should spend (and on whom) without it quickly degrading into a DGT rant.

Too bad. :(

[pffog]

People are like a deer in the headlights when it comes to Taxes, as they focus on Income tax alone. I would LOVE to only pay 36% of my income to taxes.

If you own a house, drive to work, have a phone pay utilities, spend some $$ on goods, have a state income tax and make 50k taxable income per year, a quick calculation shows you are probably paying around 50% of your income to taxes!!! YES 50%!!!!

Now if you do not move, and take a job that allows you to earn 100K taxable, your % actually DROPS about 4% to about 48%!!!

Make 250K/ don't move you are down to 46%.

Now drop your income to 35K/year, and can afford to keep your house you will pay over 54% of your income to taxes!!!!

These are all assuming your discretionary income spending stays pretty constant and just a rough calculation using fuel, property, sales and income tax rates from my little slice of the planet.

[BeemerMike]

People are like a deer in the headlights when it comes to Taxes, as they focus on Income tax alone.

What "people" are focusing only on income taxes? Certainly not me. :confused: