August 13, 2008
Recently, Exxon re-broke its own record for profit in a single quarter (Fox News). Surprise, right?
What was a surprise was that the company's stock actually went down. Apparently, Wall Street was hoping for more. They would have gotten it, too, if Exxon hadn't finally paid up on a decades-old settlement pertaining to the Exxon Valdez disaster (Fox News).
While the world's greediest company should be given the recognition it's due for finally owing up to A responsibility, it's a bit much to say that they should be given a medal of heroism, as Rush Limbaugh suggests, for their efforts to do their long-overdue basic civic duty. Their "noble" act is rather like a person not committing a crime and then expecting a reward.
As much fun as all that is, however, there is something far more interesting that merits our attention.
Most of us already know that Exxon's announcement of paying nearly half their profits in taxes is a sham. For one, even if that were true, their net gains continue to shatter record after record (AP). Secondly, it is patently false: consumers pay nearly every penny of those taxes directly; they're included in the prices right at the pump (BU).
Remember the ad the American Petrolium Institute (Big Oil's lobby/front group/think tank) put out in 2006, the one with the dollar bill divided into percentages? It showed us why the price of gas was so high, and where every dime went. Some of it went to pay for crude oil, some more went to the government, and the rest went into refining and transporting the fuel (ad in the New York Times). All of the overhead, together, added up to 100%. That's right: according to the oil companies, they don't make any money at all, let alone make record profits.
But it gets better. Last week, the "Great American" himself, Sean Hannity, revealed that most of the oil companies make so little money that they have to depend on government subsidies - "just to get by" (The Sean Hannity Show).
And, unlike most everything else Mr. Hannity says, it is the truth. The Government Office of Accountability just released a report showing that about three-fourths of all corporations in America pay absolutely no taxes at all (GOA), despite what that ad in the Times said.
That's right: things for Big Oil must actually be worse than that ad said; the record-breaking powerhouses of our "free market" capitalist economy earn so little money, they have no tax liability whatsoever. They earn so little money, they need to be subsidized to keep them from going extinct!
And, yes - Exxon is one of those "poor" companies that does receive a taxpayer-funded subsidy. Look it up; it's public record.
Of course, most of that is due to specialized deductions, special tax credits, and various unscrupulous accounting tricks, such as 'transfer fees', which allow companies to sell assets to themselves and write off the resulting financial "loss" (GOA).
To be fair, the oil companies don't control the price of crude - the speculators on Wall Street do (Fox News). You know, those fellows who buy the oil on the commodities market in order to re-sell it to the oil companies for refining? Those fellows who sell it back and forth between themselves several times, just to get the prices up? Those guys who are, in fact, employed by the oil companies (AP)? Clearly, Big Oil has nothing whatsoever to do with the price of crude; it isn't their fault. And don't you dare even think the words 'price fixing'.
So, the next time you feel a thrill at seeing a price at the pump only 300% more than it was just three years ago, remember - times are tough for everybody. It takes a lot of hard work to pull off posting a $12 Billion quarterly net profit and still show the IRS how badly you "need" taxpayer money "just to get by".