Oil Prices, Profits, Taxes, and Tall Tales

Recently, Exxon re-broke its own world record for profit in a single quarter (Fox News). Surprise, right?

What was a surprise was that the company's stock actually went down. Apparently, Wall Street was hoping for more. They would have gotten it, too, if Exxon hadn't finally paid up on a decades-old settlement pertaining to the Exxon Valdez disaster (Fox News).

While the world's greediest company should be given the recognition it's due for finally owing up to A responsibility, it's a bit much to say that they should be given a medal of heroism, as Rush Limbaugh suggests, for their efforts to do their long-overdue basic civic duty. Their "noble" act is rather like a person not committing a crime and then expecting a reward.

As much fun as all that is, however, there is something far more interesting that merits our attention.

Most of us already know that Exxon's announcement of paying nearly half their profits in taxes is a sham. For one, even if that were true, their net gains continue to shatter record after record (AP). Secondly, it is patently false: consumers pay nearly every penny of those taxes directly; they're included in the prices right at the pump (Belrad Universe).

Remember the ad the American Petrolium Institute (Big Oil's lobby/front group/think tank) put out in 2006, the one with the dollar bill divided into percentages? It showed us why the price of gas was so high, and where every dime went. Some of it went to pay for crude oil, some more went to the government, and the rest went into refining and transporting the fuel (ad in the New York Times). All of the overhead, together, added up to 100%. That's right: according to the oil companies, they don't make any money at all, let alone make record profits.

But it gets better. Last week, the "Great American" himself, Sean Hannity, revealed that most of the oil companies make so little money that they have to depend on government subsidies - "just to get by" (The Sean Hannity Show).