Obama on Exxon Profits

“I know that it won’t be easy to change our energy policy. Exxon Mobil made 11 billion dollars last quarter. They don’t want to give those profits up easily.”

-Sen. Obama

(crowd heard booing Exxon Mobil)

Firstly, why are people booing? What do you think happened with those profits?

Next -Here’s what Sen. Obama failed to mention:

On those profits Exxon Mobil paid federal income taxes of, 28 billion dollars leaving it with 39 1/2 billion in after tax income. That 28 billion dollars is more than what was collected of half of the individual tax payers in 2004. That year, 65 million returns (note that that counts jointly filed returns) paid 24.7 billion in federal income taxes.

In short – one company on those profits alone paid half of what all the tax payers of America (in 2004) paid in taxes.

Think about that for a while. One company paid half what the entire nation of individuals paid in taxes.

Once you are done thinking about that – ask yourself this hypothetical: Who do you think pays corporate taxes (you know, the ones Senators Obama and Hillary want to hike up as soon as they get elected…)?

Hillary’s take: “I want to take those profits”

jksmithpe clarified below:

“Exactly. $11Billion was revenue, not profit.

Exxon buys over half the oil they refine. Then there’s the tax man. The profits go to shareholders. In many cases the shareholders are large institutional investors that fund pensions.

I’ll bet some of the idiots booing are actually on the receiving end of Exxon profits but simply too ignorant to know it.”

The left in general have such a poor understanding of economics. I just can’t stand how little people know about what corporate profits pay for in America. (aka. Everything).

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14 Responses to “Obama on Exxon Profits”

  1. jksmithpe Says:

    Exactly. $11Billion was revenue, not profit.

    Exxon buys over half the oil they refine. Then there’s the tax man. The profits go to shareholders. In many cases the shareholders are large institutional investors that fund pensions.

    I’ll bet some of the idiots booing are actually on the receiving end of Exxon profits but simply too ignorant to know it.

    http://alaska-gas-pipeline.blogspot.com/

  2. whatthecrap? Says:

    Thanks for the comment. I bumped it up onto the post.

  3. Barfly Says:

    Obama, is a socialist pure and simple. He has a sophomoric view of the world and is popular with those who believe Ideology has the same level of credibility as an Idea. Platitudes. That’s all he has.

  4. john Says:

    let us not forget all the people employed by exxon mobile who also pay taxes. I think I read that they employ over 1400 engineers and scientists. They have some of the best paid blue collar jobs. All of these people also pay taxes on earnings.

  5. Rusty Says:

    I just have to say, that regardless of the “taxes” that Exxon paid…those profits are ridiculous when you consider that NONE of that trickles down to the consumer. The country just isn’t in an uproar enough about these ridiculous gas prices to make big oil companies do something about it. Exxon’s profits have INCREASED not stayed the same… maybe if they lowered there required profit margin then they could DEMAND that their stations lower the price/gallon also.

  6. whatthecrap? Says:

    Can you describe to me how “none” of their profits are trickling down to the consumer?

    How many employees do you think Exxon Mobil pays? What do you think Exxon does with the profits that it makes?

  7. Catie Says:

    Wow after reading this my opinion of Exxon has changed oh so much…. NOT.
    The portrayal of Exxon as a saint like company is bull!

    Yay, so Exxon paid billions in tax dollars, we should all worship them now right?
    Wrong.
    While Exxon may have paid vast amounts of tax dollars, the insanely high energy costs have closed many, many SMALL businesses….which by the way also pay taxes and employ staff that pay taxes..
    Potential entrepreneurs with big dreams of starting a business are putting their dreams on hold while energy costs are preventing them from having the extra money to start a business….a business that would, like Exxon pay taxes.
    Not only do these small business’s pay taxes, they dont get the big business tax breaks that Exxon recieves!

    So by all means lets bow down and worship Exxon for all the wonderous things it does for our economy.

  8. Starkiller Says:

    No one is “worshipping” Exxon.
    But to blame a REFINING company for the price of a barrel of oil is like blaming Burger King for the price of beef.
    The US alone consumes over 400,000,000 gallons of gasoline per day. at 9cents per gallon profit the oil ccompanies make 3.6 million per day on US gas sales alone.
    So how much profit do you think would be fair?
    If they only made 4 cents a gallon that still equates to $5 billion a year off of US gasoline alone.
    Seems a lot of folks have great difficulty wrapping their little brains around the fact that if you sell literaly billions of units that you will reap billions in profit.
    It require 42 gallons of crude oil to produce 19.5 gallons of gasoline. Exxon, Conoco et al have to buy more than half of the oil they refine from foreign sources since they don’t have enough wells in operation themselves.
    Exxon isn’t charging $130 a barrel, these guys are:

    Saudi Arabian Oil Company
    National Iranian Oil Company
    Qatar Petroleum
    Abu Dhabi National Oil Company
    Iraq National Oil Company
    Gazprom
    Kuwait Petroleum Corporation
    Petróleos de Venezuela S.A.
    Nigerian National Petroleum Corporation
    National Oil Corporation (Libya)
    Sonatrach
    Rosneft

  9. victory Says:

    Hillary: many studies show that lefties and righties generally have similar opinions, aside from the few brought on by socialist and religious influences.

    Barfly: Are you in high school? Know your basic history. The united states were founded by religious freedom idealists. We abolished slavery based on ideals of equality, and continue to improve laws based on this. Women have the right to vote because of our idealism. We are constantly changing and improving (and sometimes f-ing things up, but live and learn :), due to our idealism for the future. We have dreams and some even make them happen. America = idealism. If you as a person don’t have some basic ideals for your life, you will limit your own growth and movement.
    If you don’t respect idealism, move to France.

    A strong contributing factor to gas prices is the Enron loophole (next paragraph). Due to this country’s growth and increasing pace, many are reliant on gas to meet these demands (needing 2 f/t jobs – try to find the time to bike or walk when work takes all day plus a chunk of your night. And what if you also have a kid? These situations are actually pretty common.) This reliance on energy combined with the lack of price regulations leads to cost inefficiency and lack of budget accountability within the oil industry.

    The “Enron loophole” exempts most over-the-counter energy trades and trading on electronic energy commodity markets from government regulation.[1] The “loophole” is so-called as it was drafted by Enron Corporation lobbyists working with U.S. Senator Phil Gramm to create a deregulated market for their experimental “Enron On-line” initiative.[citation needed]
    The “loophole” was enacted in 7 U.S.C. §2(h)(3) and (g) of the Commodity Futures Modernization Act of 2000, signed by President Bill Clinton in December 2000.[1] It allowed for the creation, for U.S. exchanges, of a new kind of derivative security, the single-stock future, which had been prohibited since 1982 under the Shad-Johnson Accord, a jurisdictional pact between John S.R. Shad, then chairman of the U.S. Securities and Exchange Commission, and Phil Johnson, then chairman of the Commodity Futures Trading Commission.
    On June 22, 2008, U.S. Senator Barack Obama proposed the repeal of the “Enron loophole” as a means to curb speculation on skyrocketing oil prices.[2]

    There is no incentive to manage budgets with integrity, and put some effort into running business cost-effectively if you can simply jack up the prices when you might be tight. (Think state workers vs contracted positions)

  10. Obama’s New Ad: Marxism « What The Crap? - whatthecrap.us Says:

    […] failed to mention oil companies profit margin. Also, he neglected the fact that Exxon Mobil paid already paid 3 times as much in taxes in 2007 as it made in profits. Neither did he mention that his campegne […]

  11. bh Says:

    It is certainly true that most of us have a very poor understanding of the true economics of this issue. I learned alot just reading these comments. But according to what I can find out the $11B that Exxon made was, according to Exxon, profit..not revenue. Any company in a capitalist economy has the right to make as much profit as they can. I seems to me, however, since this product actually affects all aspects of our economy and cannot be considered a discretionary product, the oil companies do bear a responsibility to balance their profits with the economic impact on the country. I might be wrong, but it seems to me that if the price of a gallon of gas had averaged, for example, $3.20/gal instead of $4/gal (20% less), Exxon would still have made $ 8.8 B in the quarter. Profit.

  12. ADK Says:

    Geeze, everyone keeps harping on Exxon’s record profit but what most people fail to realize is that they’re actually making less per gallon than what they have in years. They’re per capita profit is down. The only reason they’re overall profits are up is that American oil consumption is through the roof. Plus the profits go to the share holders which include most 401Ks and mutual funds in the country.

    So at a time when social security is more than likely going to go bankrupt within my lifetime the government want in effect tax peoples retirement funds. Does this make sense to anyone, because it sure doesn’t to me.

    Especially since income tax aside the federal gas tax is 18.4 cents per gallon and Exxon only makes 9. Seems to me the government is making record oil profits.

  13. Donna Bordeaux. CPA, PFS Says:

    Exxon is not the evil here. They should be cheered for following the American dream to create a successful business with a product that supports America instead of the middle east. What would our US economy look like if Exxon Mobil was not around? If you all understood that you probably own Exxon Mobil in your portfolios or retiement funds, I’ll bet you would cheer them on since it effects your pocket. Would you rather us send all of the money to the Middle East? I wrote a follow up to this topic on my blog for your comments too: http://beancountermagic.typepad.com/donna/2008/10/is-exxon-really-evil.html

  14. audrey m young Says:

    profit, stupid. you lie, hope you die.


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