U.S Government "Profits" More from Gasoline Sales than Oil Industry

There is a lot of commotion and flying tempers now a days with rising gas prices, Americans struggling to afford to fill up their cars, and oil companies making record profits. But I want to try and put everything in perspective for myself and anyone else that is interested in the topic. And anyone can give their two cents to help my perspective as well. Maybe the title isn’t the most appropriate, for I don’t want to bash anyone or our government, but I want to attempt to make some sense from the chaos in the current trend and era of the “evil oil corporations.” Compared to other industries, how do the oil companies hold up? I want to say right now that I am no fan of the oil companies, or am I in any way trying to be an advocate for them, but are they what the media and politicians make them out to be? And what is the real solution to the rising prices? Just to give some data and examples, here is some tax data from around 2005 to 2006.

- “Since 1977, governments collected more than $1.34 trillion in gasoline tax revenues -- more than twice the amount of domestic profits earned by major U.S. oil companies during the same period.”

- “Exxon earned 9.5 cents on every dollar of gasoline and oil sold while the federal government collected 18.4 cents per gallon.”

- “Federal, state and local taxes total an average of 46 cents per gallon -- significantly more than the 28 cents Exxon earned on a $3 gallon of gas.”

- ““Unstated in the network coverage was the fact that the U.S. government took in more than $7 billion [in income tax] from ExxonMobil during the first quarter of 2006, a jump of more than $2 billion from the same time period in 2005. And that doesn’t count the more than $7.6 billion in excise taxes -- the gas tax -- that ExxonMobil collected for the government during the same quarter. Plus another $11 billion in 'other taxes' and ExxonMobil sent the government more than $25 billion in the first quarter of 2006”

Now that’s some of the data, im sure there is a lot more out there. And 2006 was the newest information I could find. People scream the oil companies are gouging us all out of our money, but if you look at some of that data, you find the profit margin in the oil business is less than most. On average, the profit margin for most industries in the U.S is 12%, and oil company profit is below this number. So compared to other industries, the oil company is “gouging” the American people just as much if not less than most companies. Now, if you look at banks profit of margin, the profit is much higher than oil. The only difference is the sheer volume oil is being sold at, which makes sense if you look at how much oil is used to “fuel” our lives. That, I feel, gives a false perspective resulting in the robbery claims. Now, im not trying to protect the oil companies, I just find this interesting and I don’t know what other people’s take are on this. I watched Obama speak today. And just to comment, im not using this to show what obama said is wrong or to bring politics into this and say mccain is any better. But obama said this:
- "No U.S. corporation ever made that much in a quarter," Obama said. "But while Big Oil is making record profits, you are paying record prices at the pump and our economy is leaving working people behind."
McCain's response, Obama said, is to propose a corporate tax plan that would give "$4 billion each year to the oil companies, including $1.2 billion for Exxon Mobil alone" and a gas tax holiday that Obama said would only "pad oil company profits and save you — at best — half a tank of gas" over an entire summer.
And I remember watching this on tv, and obama said we need to raise taxes against the oil companies to basically “put an end to the robbery,” and the whole crowd went up in applause. But would raising taxes really lower the gas of price? If the government raises taxes to prevent the oil companies from making the “supposed record profits,” then they are just shifting the profits into the national treasery, right? And this is an outlook a lot of politicians side with. Im no financial expert, but would it not just increase gas prices. As I stated before, the government makes more profit per gallon of gas than the oil companies. While that may not necesarilly be a bad thing, I really haven’t seen any benefit from it. I’m curious to hear other peoples take on this. And maybe they can give a different perspective on this. So, is it entirely the oil companies greed that fuels high gas prices? For margin of profit is in a healthy range. Hopefully I explained everything clearly and unbaised. And sorry if the format of the post is off, im still trying to get used to starting threads. And here are some of the links where I found the information.

- www.taxfoundation.org...
- www.taxfoundation.org...
- newsbusters.org...


[edit on 31-7-2008 by azodrac]

[edit on 31-7-2008 by azodrac]

Uh yeah, no doubt about it - that's why our auto industry is making gas guzzlers, instead of 100mpg cars they could of been making for the last 20 years.

When we really quit using gas, expect tolls to replace the invisible taxes that they've been collecting all these years.