Offshore Drilling Ban to Expire October 1st

That’s right folks….if the Democrat led Congress doesn’t renew the ban. Think about it…we have $4 per gallon gasoline, billions of dollars per year going to Saudi Arabia and the Middle East, a Democrat presidential candidate telling you to save gas by filling up your tires, and a Democrat congress that will actually renew a ban on drilling for our own resources. All I have to say is I better not hear a word from a liberal anywhere about us being dependent on foreign oil if they actually go through with this.

The saving light for this looming issue may be the Republicans. Republicans are actually threatening to shut down Capitol Hill to ensure that this ban does expire on October 1st. It may get hairy though…in order to do this Republicans would have to vote against a resolution to fund the federal government for the 2009 fiscal year. A similar tactic was done in 1995 when a Newt Gingrich led congress tried the same thing and it blew up in the Republican’s face. The public blamed Republicans for late Social Security checks and lost Medicare checks.

However, this time public opinion is in the Republican’s corner. The overwhelming majority of Americans support drilling for our own resources, so what is necessary is informing them of the Democrat led effort to renew the ban on offshore drilling. The Republicans have five weeks until Congress is back in session. Can they do it? It’s a tall task when the media is doing everything they can to elect Barack Obama along with every other Democrat in the country.

Spread the word and call your congressman to oppose this ban on drilling!

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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.

A Big Crock of Biofuel

Ethanol has become public enemy number one. Not only do we get lousy gas mileage with corn based ethanol, we get higher food prices too! This problem began in 1994 when a Senate vote on mandated ethanol use was tied 50-50 and broken by Vice President Al Gore. So say thanks to Mr. Gore for the real crisis that is looming….food shortages. The general public is just now becoming aware of the real problems ethanol is causing and support for elimination of mandated biofuels is building from the left and the right.

Ethanol is placing liberals in a real bind. One one hand, they feel the need to try to manipulate companies like Exxon Mobil by forcing them to accept alternative fuel, yet by using these alternative fuels, it drives up the cost of food and disproportionately affects the poor worldwide. So, we can either “save the environment” by ethanol and starve millions worldwide by driving up food prices, or we can just stick with tried and true fossil fuels and keep feeding everyone. Not surprisingly, the same people that demand we use ethanol also oppose drilling for additional sources of oil, including in ANWR. If we had started drilling for oil in ANWR ten years ago, it is possible that oil prices would be considerably lower than they are now. Higher oil prices means higher prices on all the goods we buy and higher transportation costs.

Ironically, corn-based ethanol and other blends of biofuels have been shown to produce substantially more greenhouse gases than regular gasoline. This ethanol issue illustrates a common problem with our representatives in Washington D.C. Too often policies are promoted based off of fads in the public without their consequences being fully studied before being made law. In this case, mandating the use of ethanol was justified under the guise of reducing greenhouse gas emissions. The result? Ethanol produces MORE greenhouse gas emissions than regular gasoline, using ethanol drives up the price of food worldwide, and ethanol causes us to use more fuel than we would if we used regular gasoline because of decreased fuel efficiency. If ethanol was really this hidden gem and had huge potential, wouldn’t it be advantageous to big oil companies to research this technology themselves? Yet, ethanol has not replaced traditional gasoline among the private sector by any big energy companies largely because it is a lousy fuel source. Policy makers in Washington have mandated that we use this new technology without researching the true effectiveness or consequences. This is yet another example of the government sticking their noses and their policies where they shouldn’t. It has only resulted in harm to American citizens and businesses with literally no benefit.

Right now, 1/3 of the corn produced in the U.S. goes to ethanol production. It takes 400 lbs of corn to make 25 gallons of fuel. So with that 400 lbs of corn, we can either feed a grown man for a year or we can fill up our car twice. It seems to me that feeding everyone affordably is more important that responding to a global warming “crisis” that doesn’t even have a scientific consensus yet. After all, we can actually prove that people are starving, whereas we can’t prove that ethanol will have any effect on anything climate related.

Now, I’m not saying that all biofuels or all ethanol are lousy fuels, but for now, the ones that are available certainly seem to be. The mandated use of ethanol isn’t solely responsible for the rising food costs worldwide, but is unquestionably a large factor. The farmers and researchers that are beneficiaries of ethanol use don’t want the public to know the truth…that corn-based ethanol is a bad fuel that never should have been mandated in the first place. Corn-based ethanol has been called a “transitional” technology by some, so why are we forced to use it? Because it is a fad that congress has bought into.

Congress needs to do its job and eliminate subsidies for ethanol NOW. But with Reid and Pelosi in charge, we can count on further bad energy policy for the future where more clout is given to environmental fads than actual verifiable research. As long as liberals (Democrats and Republicans) are at the helm, we can be assured that $7 per gallon milk is right around the corner.

McCain Finally Makes Some Sense

I am utterly disappointed with John McCain and the way he is running his campaign. My displeasure with Senator McCain has been going on for about twelve years now, so I can’t say that I am all that surprised by the fact that I don’t agree with him on most things now. Republicans that voted for McCain solely for his “electability” may not even get what they ask for if he keeps up this class warfare and global warming nonsense. If he doesn’t change his tune and take a conservative stance on the majority of issues, he risks completely isolating the conservative base of the Republican party. And no matter what anyone tells you, there isn’t a politician in the history of America that ever won the Presidency while isolating the base of his own party.

With all that said, McCain finally made a little sense today as he called for the suspension of the federal gasoline tax. Thank God! All we ever hear about is how GREEDY the big bad oil companies are and how they are soaking all of us. Very few people realize that the government makes more on a gallon of gas than the oil companies do. The oil companies search, drill, refine, ship, research more types of energy and better ways to maximize the use of oil and gas and make about 9-12% profit. On the other hand, the government sits around and talks about how big and bad and evil these companies are, and the government taxes an average of $.47 per gallon of tax nationally (state and federal combined), or between 12-15%. The federal tax is 18.4 cents per gallon on gas and 24.4 cents per gallon on diesel. So government bureaucrats don’t do anything for the process other than criticize the oil companies and pass laws making it harder to do their job, but the government actually soaks the American people more than the oil companies do.

Eliminating the gas tax would have a tremendous effect on the economy, much more than any nonsense stimulus package that gives each of us between a few hundred to a little over a thousand dollars this spring. Eliminating the gas tax would not only help us out a little at the pump, but it would stimulate the economy by decreasing transportation costs (planes, trains, automobiles). Decreased transportation costs would ultimately help drop the price of good in the stores (because they don’t cost as much to ship to the store). Now, just eliminating the gas tax wouldn’t turn a failing economy around, but it would at least help ours and I think much more than anything else the government is offering right now.

McCain’s problem is that he doesn’t go far enough. He should call for a permanent repeal of the federal gas tax and not just a summer vacation from it. He should call on states to repeal their gasoline taxes as well. He should adopt some new ideas like the FairTax plan to overhaul the federal tax system. If McCain ran on a true platform of tax reform and decreased government spending, he might just have a real shot at winning this thing. The problem is, I don’t think McCain really believes in real tax reform. It’s pretty hard to believe that he’s sincere when he spends half his time spouting Democratic talking points about class warfare.

Exxon Mobil: Pays more tax than 50% of Americans combined

From many of the politicians in Washington, you hear over and over about how BIG OIL is the enemy. Barack Obama actually said several weeks ago that America needs to free itself from the “tyranny of oil”. Similar rhetoric is common throughout the left. Maybe someone on the democratic side of things should explain to us how oil companies are tyrannical. Oil companies provide a needed resource that every American regularly uses. Without oil, we’d be cold in the winter and we wouldn’t be able to drive our cars. And now as it turns out, if BIG OIL (particularly Exxon Mobil) weren’t around and profitable, the treasury would be about $27 billion dollars smaller every year. Exxon Mobil has paid an average of $27 billion in taxes annually over the last 3 years.

These are simply amazing statistics that were published at Seeking Alpha by Mark J. Perry, Ph.D. The most recent IRS data to compare the U.S. individual taxpayer’s tax burden to Exxon Mobil’s tax burden is from 2004.

  • Total number of tax returns: 130 million
  • Number of Tax Returns for the Bottom 50%: 65 million
  • Adjusted Gross Income for the Bottom 50%: $922 billion
  • Total Income Tax Paid by the Bottom 50%: $27.4 billion

So, the bottom 50% of individual taxpayers (65 million total) in this country paid a total tax rate of 3% in 2004 ($27.4 billion/$922 billion). Compare that to Exxon Mobil in 2006, which posted taxable income of $67.4 billion and paid $27.9 billion in taxes for a total tax rate of 41%. Unbelievable.

The big spenders in Washington should be singing the praises of the big oil companies, since it seems that one company funds more of the federal budget than 65 million taxpayers. Maybe Exxon Mobil should receive a fat tax rebate check come May of this year. I’m not going to hold my breath on that one. After all, Exxon Mobil doesn’t have 65 million votes and the ability to sway an election.

Here’s the full article if you’re interested in reading more.