Exxon Mobil Setting New Records In Income Tax

Exxon Mobil reported this week that it set an all time new record— not in earnings or profit, but in income taxes paid to the government in a single quarter. Exxon Mobil paid $9.32 billion in income taxes in the first quarter of 2008 alone, which is a record for U.S. corporate taxes. Profit was $10.89 billion, which was the second highest ever for a U.S. corporation in one quarter. Total overall tax burden for Exxon Mobil this quarter was $29.3 billion if you include income taxes, sales taxes, and “other” taxes, which turns out to be a 25% total tax rate when you examine total revenue ($116.85 billion). Taxes paid by Exxon Mobil was nearly triple what they made in profit.

Exxon Mobil

With oil prices and gas prices through the roof, this warrants some examination. If you haven’t already noticed, the discussion of corporate taxes is an acute political issue. On one side, you have the Republicans, who are for tax cuts for pretty much everyone (including businesses). On the other side, you have Democrats who claim they want tax cuts for the poor and want to stick it to businesses (like Exxon Mobil) and the “rich”. While “tax cuts for the rich” tugs at the heart-strings of every person with wealth envy in this country, it doesn’t really make much sense in the end. Who are the “rich” in this country? They are the small business owners, the big purchasers, and the people who employ the rest of us. What sense does it make sticking it to them? When the so-called “rich” get nailed by taxes, they make cut backs like the rest of us. They hire fewer people and they don’t buy as many nice things. Jobs and retail sales suffer and the economy slows down.

As for corporate taxes, here is the big myth debunked: Corporations don’t pay taxes! They don’t now and they never will. Corporations COLLECT taxes only. When a corporation is taxed, the corporation figures it into the cost of goods sold and it is passed onto the consumer. Only the consumer pays taxes. That’s how it is now and that’s how it will always be. Every business, including oil companies, does this. This is a stealth tax on consumers. By some estimates, this stealth tax averages out to 22% on everything we purchase. On gas purchased from Exxon Mobil and other American oil companies, it’s more like 25%. That’s 25% of every gallon going right to the federal government.

Yet, 25% isn’t enough for liberal politicians. Just a few days ago, Barack Obama called for an additional $15 billion per year tax on oil companies. This is a statement from the Obama campaign as reported by Bloomberg.com:

“The profits right now are so remarkable that one could trim them 10 percent or so, which would turn out to be somewhere in the $15 billion range,” said Jason Grumet, an adviser to the Obama campaign.

Oil companies would still have ample reason to “continue to pursue production, while at the same time providing relief to consumers,” Grumet said.

Relief to consumers? Are you kidding? How does raising taxes on oil companies by $15 billion provide relief to consumers? Does Mr. Grumet honestly believe that gas prices are going to fall after the government confiscates more money from oil companies? Of course not, this $15 billion is going to show up right at the gas pump when the national price of gas jumps an additional 15-20 cents a gallon. See the twisted logic of liberals?

There is a giant disconnect between liberals and basic economics. Yet, it gets them votes on election day because of the ignorance of the public. The myth of corporate taxes continues to prevail among the masses and people think that by taxing oil companies that somehow it doesn’t affect them. It does, and it is probably one of the most devious methods our government uses to tax us–the stealth tax.

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