Posted by
ROWELG on Tuesday, July 08, 2008 12:00:00 AM
“Greedy corporations making massive profits?” That is deceptive reporting. Define OIL for what it truly is! OIL is you and I, not an IT or a THEY. Financial Institutions that you and I, and pension funds, invest savings in own oil. Nobody was complaining back in the 1990's when they (we, our investment portfolio's) were losing. Check out the industry financial numbers on Yahoo Finance.
First, investors (retirement and savings funds) have over $3 Trillion of life savings at risk in this industry employing a half million people who also pay massive taxes. Industry gross profit is around $240 Billion. Of that, government gets $100 Billion. About $91 billion is invested back into the business for expansion. About $7 billion goes to banks for the long-term debt they carry. Finally, out of it all, $6 billion goes to stockholders, or .2% on the risk capital. Corporate Tax in the US is 5th highest in the 30-nation organization, at 35%. That excludes around 6-8% to State corporate tax. That excludes the $70 billion the industry pays out for government Social Security and Medicare taxes on those 500,000 employees, also accumulated into the end price tag of gas.
It is not OIL that gets the most money. It is government. First, the government kept all mineral rights in all those homestead land grants. Know that oil exploration only happens upon any lands or waters unless authorized by a government. Government gets paid for that access, and every step in the supply chain including point of consumption.
Gas prices around the world run from 14 cents a gallon in non-taxation countries like Venezuela, upward to $6.50 a gallon in the more socialist countries like the Netherlands and Norway. The recurring cost to make a gallon of gas is less than 50 cents if refined at the point of the pumping. It is not the oil companies that suck out that extra $6.
They say we travel 2 trillion miles in USA and that equates to about 100 billions of gallons of gas. That says that this $170 billion in taxes paid by the corporations to federal and state adds about $1.70 to the costs of gas. This excludes the taxes at all the other supply chains feeding into this oil industry, and taxes at the local distributive and retail ends which adds likely another good 50 cents. As I said, for $3 gas a gallon, you figure out who is getting the most, the biggest piece of the total pie. The approximate $2.20 to the government, or the 1 ½ percent or 5 cent return to we the stockholders.
Know your basic economics. Corporations are tax collectors. Consumers pay all the taxes. The gas explorer’s pays taxes and passes it on. The driller pays taxes and plows it into the costs passed on. And, so on and so for the pumpers, the tankers, the refineries, the truckers, the gas stations, the attendants. Each and every stop of the supply chain pay taxes and passes it onward accumulated into the end retail cost. In the end, the consumer pays the tax. For a $4 gallon of gas, at least half, or $2 is trickled into government over the supply chain process. Compared to that, little flows into our financial institutions for we the owners benefits. We pay at the pump now as consumers, or pay at time of retirement with less capital gains and with a lesser purchasing power. Liberals are raiding our retirement purchasing powers, but we won't know that until it is too late.