We all have heard the Democratic politicians complaining about the ‘obscene’ profits oil companies make and how they want to take those profits away from them. Now, let’s examine the facts behind those profits. According to Tax Foundation data, U.S. oil companies cleared $630 billion after taxes while paying $518 billion in federal and state corporate taxes at an average rate of 45% from 1977 to 2004. Over the same period, an additional $1.34 trillion in excise fuel taxes was collected from consumers by the oil companies and turned over to various governments.
Where did those profits go? The vast bulk of that money is plowed back into research, development, exploration and drilling to keep the oil flowing. A very small percentage of it is distributed to stockholders who have risked their capital to build an enterprise that provides an essential good — the lifeblood of our economy. Far from imposing a hardship on the economy, oil company profits increase the wealth of those same shareholders, many of whom are everyday Americans feeling the bite of high gasoline prices.
What would happen if the federal government took away the bulk of those profits through increased taxes? There would be less money left for oil companies to explore and drill for oil. Consequently, there will be less oil produced domestically. That needed oil would come to us through increased imports. Those increases in imported oil, in essence, an increase in the total world demand for oil without a corresponding increase in the supply of oil, would necessarily drive oil prices higher, probably much higher. The goal of achieving energy independence would be even further from our grasp than it is today.
Getting it Right - Welcome
The goal of this blog is to publish my thoughts on a variety of economic and political topics in the hopes that people who find them educational or beneficial will utilize them and/or forward to others who might find them interesting and/or worthwhile to promote to others, possibly including politicians who can push some of these ideas to fruition. The topics in my blog are meant to be of value on a long term basis, not a daily diary or political issue of the day log. If the information posted is useful to you, by all means utilize it and/or forward it as you see fit. If not useful, then merely ignore it. There are no universally agreed upon truisms and too little tolerance between some of those with opposing viewpoints to successfully convince the people with hardened opinions to move away from them. I am an analytical type person who will try to be as factual as I am able.
I disdain the current popularity of name calling and condemnation of viewpoints with no factual alternatives or logical solutions given that I see so often. If you don't have a solution based on fact and logic, then opt out of the discussion because you have nothing to contribute. My background is a degree in Economics from the University of Michigan and 39 years working in middle management jobs for a major retailer. My opinions are forged on the personal experence of life, family, friends, and work as well as triumphs and mistakes that I have made and hopefully learned from. My hope is that this blog helps you.
My first topic will be about personal finance. I chose that one first because most of us work long and hard just to survive but not all of us realize our dreams of becoming financially independent from the labors of our work. Much of our political votes/thinking also focus on the economy and in particular how well we are personally doing financially.
It is relatively simple, without sacrificing the enjoyment of living for 'today' and even at moderate incomes, to retire as a millionaire or multi-millionaire, if you focus on that goal consistently from a young age. It is also simple to ensure that your child or grandchild retires rich. It merely requires a one time gift of just $2,000 invested wisely and the passage of time. Please read my first post on this blog to learn more.
An index/schedule of past and future posts and their dates will always be updated so that it becomes the first post that you see below. If the date of a post that you wish to read is preceded by the word "Posted", then find it below or click on the title in the Blog archive to review.
Wednesday, October 1, 2008
Subscribe to:
Posts (Atom)