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Tax the government on excessive oil profits!!!

Tuesday, June 10, 2008

All of this talk of taxing the eeeeevil oil companies for their ill gotten gain made me wonder how much money they are actually making. So I looked up the "Estimated Gasoline Price Breakdown" on the State of California's website, and was shocked!

I found out that the eeeeevil oil companies are actually GROSSING LESS money than the government is profiting!!

Here's the breakdown:


June 2, 2008
Distribution Costs, Marketing Costs and Profits (Oil Co)
Crude Oil Cost (Pure cost)
Refinery Cost and Profits(Oil Co) $0.51
State Underground
Storage Tank Fee (Government cost)
State and Local Sales Tax(Government) $0.31
State Excise Tax(Government) $0.18
Federal Excise Tax(Government) $0.18
Retail prices(total) $4.24

So if you add up the Oil Company potential profits, the MOST they could profit on a gallon of gas is $0.62 per gallon. Of course, they have to truck the gas to their stations, hire drivers, hire station attendants, own trucks, pay rent, etc. etc., so their profit is likely just a fraction.

The government, on the other hand, makes $0.67 per gallon, and all they have to do is collect the money.

So who is gouging Americans? The Federal, State, and Local government are killing us! About $12.00 of your gas tank is pure tax.

Think about that before you think about hating the eeeeeevil oil companies.

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Higher taxes on oil companies?

With gasoline prices topping $4 a gallon, Senate Democrats want the government to grab some of the billions of dollars in profits being taken in by the major oil companies.

Senators were to vote Tuesday on whether to consider a windfall profits tax against the five largest U.S. oil companies and rescind $17 billion in tax breaks the companies expect to enjoy over the next decade.

"The oil companies need to know that there is a limit on how much profit they can take in this economy," said Sen. Richard Durbin of Illinois, the Senate's No. 2 Democrat, warning that if energy prices are not reined in "we're going to find ourselves in a deep recession."

The Senator is either foolish or is simply using this opportunity to advance his liberal agenda. His groups of Senators are pushing to "punish" the oil companies for making a mere 7% profit by increasing taxes on them?

Anybody who understands economics knows that a tax on oil companies is, in effect, a tax on consumers. The oil companies ARE going to make money. Corporations EXIST to MAKE MONEY. So if the government is going to impose higher taxes on the oil companies, those same oil companies have no choice but to pass on their higher costs to you and I as we fill up at the gas pump, buy Airline tickets, and buy milk at the grocery store.

Higher taxes on a commodity producers cannot, will not, never will cause the cost of their commodity to fall. Clearly, this is just a ploy by Durbin and the US Government to try to grab billions of dollars on a short term scheme that will, in the end, punish the least fortunate Americans.

What I don't understand is why we are waiting on more minute to slash taxes on oil companies on investments and profits they make on domestic oil sold to American markets. We should encourage American oil companies to pump American oil, mine American shale, and sell it into the American market.

Exxon, Shell, and their ilk are making a lot of money, yes. But they aren't making obscene profits. Seven percent profits are not excessive. They are not to blame. Instead, OPEC, Venezuela and their ilk are to blame with their subdued production. Make no mistake, the Saudis and the other Islamic oil countries are doing whatever they can to take down the West economically.

Americans have to give up their hate of American oil companies. They aren't the criminal here. The American government combined with hostile oil producers like OPEC are to blame in my book.

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