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Home🌌Off Topics🌌Off Topics News & Politics › Be careful who you vilify.... With a little perspective.
04-28-2011 07:20 PM  10 years ago
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helo_chris

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Be careful who you vilify.... With a little perspective.
With the price of crude oil on the rise it seems that rhetoric always follows. I had heard this so I decided to do a little research. So before you try to vilify the oil companies, of which Exxon seems to draw the most ire; how about a little perspective.
The company reported total revenue in 2008 of over $477 billion, giving the company a profit margin of about 9%. That's in line with other manufacturing industries, and far below the margins seen in other sectors, such as tech.

The company returns most of its profit to shareholders, distributing about $40 billion in 2008 in the form of share buybacks and dividends.
When oil prices blew sky high in 2008, ExxonMobil paid $36.5 billion in income taxes, $34.5 billion in sales taxes, and $45 billion in other taxes, for a total of $116.2 billion in taxes paid and collected in 2008. That’s according to Mark Perry at the Carpe Diem blog.
As you can see Exxon paid $116.2B dollars in taxes on $477B in revenue with a profit margin of 9% in 2008. By comparison check out this chart from CNNMoney.com with profit margins as a percent of revenue by Industry. Below are the top 10. Exxon actually recorded lower margins than the industry average.
Industry Rank Industry 2008 Profits % of revenue
1 Network and Other Communications Equipment 20.4
2 Internet Services and Retailing 19.4
3 Pharmaceuticals 19.3
4 Medical Products and Equipment 16.3
5 Railroads 12.6
6 Financial Data Services 11.7
7 Mining, Crude-Oil production 11.5
8 Securities 10.7
9 Oil and Gas Equipment, Services 10.2
10 Scientific, Photographic, and Control Equipment 9.9
For some comparison, the average per gallon fuel tax in the US is $0.41 per gallon. The only numbers I could find are from 2007 but that amounts to an estimate total based on average US consumption of $64B collected in taxes. Now compare that $.41 per gallon that the government gets compared to what Exxon averages per gallon in profit.
According to this post on Exxon Mobil's Perspective Blog , "For every gallon of gasoline, diesel or finished products we manufactured and sold in the United States in the last three months of 2010, we earned a little more than 2 cents per gallon. That’s not a typo. Two cents."
Now for a little more perspective. Compare the $116.2B Exxon paid in taxes in 2008 to individual income tax receipts for the same year.
Income Bracket/Income Taxes Paid in Millions/% of Taxes Paid
Top 1%/392,149/38.02%
Top 10%/721,421/69.94%
Top 25%/890,614/86.34%
25-50%/113,025/10.96%
Top 50%/1,003,639/97.30%
Bottom 50%/27,873/2.70%
Now a little math, add the total taxes paid by the 25-50% AGI group with the bottom half, for a total of $140.8B paid in personal income taxes. As you can see from that, Exxon alone pays more in taxes in any given year than almost 75% of the population of the US. And that doesn't even take into consideration any payroll taxes paid or income taxes paid by Exxon employees.

http://money.cnn.com/2009/01/30/new...sion=2009013011

http://www.nationalreview.com/artic...es-larry-kudlow

http://money.cnn.com/magazines/fort...stries/profits/

http://mjperry.blogspot.com/2011/04...n-vs-exxon.html

http://www.taxfoundation.org/news/show/250.html#Data

http://www.babeled.com/2008/06/22/b...l-and-gasoline/
"There is a fine line between cutting edge and bleeding edge.."
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04-28-2011 08:00 PM  10 years ago
GyroFreak

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Good info. ThanksThe case against politicians simply is that when they legislate for all men, they always omit themselves
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04-29-2011 01:03 AM  10 years ago
Dennis (RIP)

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As you can see Exxon paid $116.2B dollars in taxes on $477B in revenue with a profit margin of 9% in 2008. By comparison check out this chart from CNNMoney.com with profit margins as a percent of revenue by Industry. Below are the top 10. Exxon actually recorded lower margins than the industry average.

Quote
Industry Rank Industry 2008 Profits % of revenue
1 Network and Other Communications Equipment 20.4
2 Internet Services and Retailing 19.4
3 Pharmaceuticals 19.3
4 Medical Products and Equipment 16.3
5 Railroads 12.6
6 Financial Data Services 11.7
7 Mining, Crude-Oil production 11.5
8 Securities 10.7
9 Oil and Gas Equipment, Services 10.2
10 Scientific, Photographic, and Control Equipment 9.9
Please also note that the article mentions "Profit". Thats not "Net Profit". "Profit" is profit before costs. "Net Profit" is profit "after" operating costs are figured in.

Huge difference that most people have no clue about and entails millions, even billions of dollars. "Net Profit" for large industries is usually in the 1% to 6% range. Even for smaller corporations, a 3% to 5% "Net Profit" is acceptable. If any company has any sustained periods at all with no "Net Profit" or a negative "Net Profit" they will surely die. ""Net Profit" is fundamental and crucial for any company to survive and grow.
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04-29-2011 06:36 AM  10 years ago
shawmcky

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Shell posted profits up 41% yesterday .I dont feel so sorry for them nowTeam- unbiased opinion.K.I.S.S principle upheld here
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04-29-2011 06:48 AM  10 years ago
Dennis (RIP)

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Shell posted profits up 41% yesterday .I dont feel so sorry for them now
Thats "Profits" they reported.

Not "Net Profits".

Huge difference. Huge.
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04-29-2011 06:54 AM  10 years ago
shawmcky

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Still don,t feel quite so sorry for them Dennis,sorry about thatNot to be so sorry i meanTeam- unbiased opinion.K.I.S.S principle upheld here
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04-29-2011 06:59 AM  10 years ago
shawmcky

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Want some advice on investments and profit Silver,bombs and bullets and reconstruction overseas,big money there,just got to win all the contractsYour shareholders will be over the moonTeam- unbiased opinion.K.I.S.S principle upheld here
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04-29-2011 07:01 AM  10 years ago
Dennis (RIP)

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Still don,t feel quite so sorry for them Dennis,sorry about thatNot to be so sorry i mean
Yeah, I know what you mean.

Just keep in mind that the states and the feds always make a heck of a lot more money in tax dollars on gas sales than the oil companies make in profits or net profits. A lot more.

Then the feds and the states start up investigations into the oil companies when the price goes up. For years they have always done that and nothing ever comes from it. Its crazy.
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04-29-2011 07:09 AM  10 years ago
shawmcky

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True, more than 60% of UK gas prices are government taxes,shame they dont publish the figures on those fuel taxes here,would open a few eyes and mouths hereTeam- unbiased opinion.K.I.S.S principle upheld here
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04-29-2011 07:13 AM  10 years ago
Dennis (RIP)

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True, more than 60% of UK gas prices are government taxes,shame they dont publish the figures on those fuel taxes here,would open a few eyes and mouths here
You have our sympathies.

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04-29-2011 02:42 PM  10 years ago
helo_chris

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goodlettsville, tn

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Thanks Dennis, I didn't even think to make that distinction. And yes it can be huge, to the point that even after posting a profit when everything is netted out the company could very well still lose money.

You guys do have our deepest sympathies. It is saddening to know what has gone on in the UK and EU and to watch us heading down the same path despite the struggles taking place there. I guess our liberals think they are smarter than you liberals...
"There is a fine line between cutting edge and bleeding edge.."
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04-29-2011 04:09 PM  10 years ago
Dennis (RIP)

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You guys do have our deepest sympathies. It is saddening to know what has gone on in the UK and EU and to watch us heading down the same path despite the struggles taking place there. I guess our liberals think they are smarter than you liberals...
Yeah, that is what they think and they are getting away with it.

That battle is going to be hard fought, and the outcome is iffy at best. Its not over.
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04-29-2011 04:28 PM  10 years ago
shawmcky

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The government puts its own tax on fuel before you buy and V.A.T after(At 20%),then tell you that inflation is on the way up because of high commodity prices,then will use it as an excuse to put up interest rates,which no doubt will come soon,any spare cash people might have had will be eaten up by higher mortgage rates that will follow.I do not know what U.S credit card interest is,but our average is 18%.When things are tight and the banks have taken all the taxpayers money,why are they still allowed to screw the public with huge rates when times are tough?We are mugs.When you buy an item here i would like to know how many times it is taxed before you get it home Help from the goverment(Don,t care who or which)is a contradiction in terms as far as i am concernedTeam- unbiased opinion.K.I.S.S principle upheld here
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04-29-2011 06:34 PM  10 years ago
helo_chris

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"The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"
-RR
"There is a fine line between cutting edge and bleeding edge.."
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