How Evil is Exxon-Mobil? 48 comments
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Some politician (I am supposed to know his name, but this is a stock blog and not politico.com) immediately pounced on Evil Exxon-Mobil's (XOM) $11.68 billion in profits, and deemed that they needed to be taxed to the fullest extent. So, I had to investigate.
This is what I found. Exxon-Mobil had a pre-tax income of $22.2 billion. They paid $10.5 billion in taxes on the pre-tax income - for after tax profits of 11.7 billion. Yes, $11.7 billion is a lot of money. So, I dug in further. What about sales based taxes ? They paid $9.5 billion (in addition to the $10.5 billion on income). What about excise taxes? They paid $12.3 billion in excise taxes. In total, the $11.68 billion was 8.5% of their revenues of $138 billion for the quarter. Nice numbers, but let's see - the tax man got $10.5+12.3+9.5 = $32.3 billion.
Since I am not rich (enough) yet, I want to eat the rich too - yeah, tax the SOBs. But in the case of Exxon-Mobil, that would be tantamount to killing the goose that laid the golden egg. Flog the goose dear politician - do not kill it please. Not yet. You might think you don't need them, but $32.3 billion says you do.
Disclosure: none
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This article has 48 comments:
Tech companies earn considerably more profit (percentage-wise) than oil companies. For example, Microsoft earns a 29% profit. Why isn't Chuck Schumer going after Microsoft for making a huge profit selling a crappy product like Vista ?
D'Amato correctly labeled Schumer as a Putz 10 years ago.
regarding an earlier observation about IndyMac and schumer's role in that debacle...he criticizes wall street for "rumor and innuendo" and its manipulative effect on stock prices, yet his sky-is-falling rhetoric on IndyMac produced a $4B-to-$8B bailout from FDIC that, oh by the way, can only do about 10 more such bailouts before it runs out of the fractional reserves it has for the fractional banking system.
schumer is a poster child of all that is wrong in congress and yes, he gives the arkansas twister credibility...
There is quite a contrast in Washington.
You have Schummer who is totally useless, except for pandering for votes. If we could harness all that hot air he spews, we would be well on our way to energy independance.
Maryland is blessed with an excellent congressman, Roscoe Bartlett.
He is aware of the consequences of Peak Oil. He is working diligently to get America off of fossil fuels and advocates a comprehensive energy policy.
I liked Obama iinitially, but realized in the last few months he is like most other politicians whose primary goals is to get votes at any cost.
I agree with you. Let's make money off the inaction of these politicans. I like Exploration and Production as well as Oil Field services and Deep sea drilling companies myself.
I am glad to see someone talk about the risk-free rate of return. I thought I was the only one left in America to remember and understand the concept. You must have gone to a private college.
A/O yesterday, the 30 year RFR was 4.59% and XOM put up with all of the Democrap spittle to realize 8.50%. Hmmm.
The deals and entanglements they bound we Americans up in have a cost far in excess of that which we are paying for at the pump today. When the Exxon Mobils, the Chevrons, the ConocoPhillips, etc, decided that they could provide the production expertise to virtually every oil producing nation on earth in return for reciprocal "deals" enabling them to buy boat loads of crude at whatever price OPEC (and others) set, deliver it to their refineries and pass the cost on to us, our national security, our economy and ultimately our American way of life was, and has been, seriously endangered.
Those so-called "petro dollars" that are flying out of this country, the monstrous rise in worldwide terrorism and the fathomless amount of money spent on "defense" insuring that ill fated policy,has the capability to bring this nation to its economic knees.
We have reached, or passed, the time where America can with impunity, dictate its future. If we are to continue it is imperative that we rid ourselves of the national addiction to crude oil. It is simply a substance we do not have and certaily should not want.
We can no more be independent while being dependent on foreign governments to furnish us with possibly the single most important element of our economy, energy, than we could turn lead into gold.
With an unharnessed, but virtually unlimited source of solar energy and recently discovered massive reserves of natural gas here in the United States we can regain control of our national economic future and relatively quickly. We have the means to do so, all we need is the national resolve to do so. Our children, our grand children and their grand children deserve no less than a secure safe future.
Alamo, nice point, but really it is the face in the mirror that demands a lavish daily oil massage..... every read the things we did just to get fruit?
However, the $32 bil estimate above is incorrect. According to the SEC, when all of the subsidies and royalties are factored in (some of the "taxes" mentioned above are actually royalties for extracting the national resource), Exxon paid an effective tax rate of 34% to the U.S. government in 2007, or $5.12 billion. citation: www.wnbc.com/news/1613...
The fact is our economy, and the communities we work and live are all currently too energy intensive and inefficiently zoned and spread out to be economially sustainable at this time as oil and other energy prices rise. The U.S. needs to seriously rethink and retool how it does business and how it uses resources. Our military is currently spending over $700 million a year including supplemental spending for the wars, yet all of our current military technology is virtual useless at defending us if it is increasingly more expensive and difficult to obtain the huge quanties of oil we need to maintain our current economy and military operations around the world.
America's powerful superpower oil empire has been dying since the 1970's but we haven't been really dealing with it. If we are not careful, we won't have the energy we need to sustain our economy and defend ourselves individually or at the same time. It would be possible for oil rich Russian or even Iran to attach us if we cannot obtain the energy resources needed to operate our enormous mechanized military.
I doubt this quarter's tax distribution was any different.
IO looks like a very interesting company. I like their diverse portfolio of services (land and marine acquisition, data processing and services).
My only concern is their PE ratio is a bit on the high side (i.e. 33).
Any thoughts on the higher than normal PE ?
I can see this company doing well with the next oil rally.
BTW: It does seem that N.Y. State has trouble electing Senators.
I like E&P companies that pay fat dividends: COSWF, PWE, ERF, SJT, HGT as well as the services guys RIG and BHI.
Silex looks very interesting. Their technology is not only applicable to uranium enrichment, but I like the alternative applications to the microelectronics industry as well. Any suggestion when is a good time to buy into it? Do you think it has bottomed out ?
any opinion on NOV, have some already, and understand that one of the restrictions to greater oil availability is a backlog in rig construction. Stock is high but is it a good time to get more.
It would answer the question for me , and maybe shut that woman up !
Thank you all for brilliant comments...especially about Chucky the Jackass !
B
I think all the rig operators (DO, RIG, Noble, Pride, etc) are great investments. They typically get paid $1/2 million per day for deep sea drilling regardless of whether the drill results are good or bad. They have their rigs booked 2 years in advance. Therefore, NOV who builds the rigs for these guys stands to reap the same upside of guaranteed and stable revenue. The only risk is if oil prices drop significantly, which I doubt will happen.
Beneficiary: Absolutely nothing will get her to shut up.
Exxon just takes their cut and sends the rest of my money to the government.
Also, no mention in this article about highly paid employees.
I did not earn One million dollars last year.
And I resent it when corporate executives ( like the CEO's at freddy and fanny who made over 10 million dollars, each, in 2007) lose billions of dollars and get paid more than they deserve.
At Penn West (PWE) a Canadian oil trust, there are two executives who earn over $40,000.00 A MONTH from DIVIDENDS on the shares they own. They also get a salary and benefits ( like options ) and I am sure that all these wealthy executives do not have to worry about whether they can afford to heat their homes this winter.
We are being cheated by OPEC, foreign governments ( for US citizens, the Canadian government takes 15% of your dividends immediately ) the oil executives and the US government.
Oil prices are being manipulated and not enough US citizens know about it YET.
Go to:
www.stopoilspeculation.../
to learn more.
Where have all the fair-minded people gone?