Posted by
Kyle Singleton on Wednesday, November 19, 2008 12:44:01 PM
You might have heard some screaming from the left about oil company Exxon Mobil's 3rd quarter profit, approximately $15 Billion, and how they are ripping off consumers, or something to that effect. But let's delve a little deeper. Exxon does have a large profit, but it is mostly because they are a LARGE COMPANY. Their profit margin is about 7% (i.e., they make 7 cents profit on every dollar of sales), that is about average. That $15 Billion represents after-tax income. At a 35% corporate tax rate, that means they paid $8 Billion in federal income taxes. Furthermore, the combined state and federal gas tax is, on average, 47 cents a gallon. So, if gas costs, say, 3 bucks a gallon, the government is making 47 cents a gallon on the gas tax alone, and Exxon Mobil is making 21 cents (7 cents a dollar times 3). The moral of the story: Exxon Mobil and other oil companies aren't ripping us off, the government is. The oil industry is already overtaxed, any tax increases (windfall profits tax?) won't make prices go down, they will probably go up. Also, how can you expect the government to really pursue energy independence, when they can make billions off the oil industry by doing more of the same? The government has no financial motivation to change anything.