Who profits from "Big Oil"

Ever since the government and tort vultures picked "Big Tobacco" clean, they have to move on the latest/greatest revenue source to line their pockets.

Last week, Hillary Clinton offered that she would "take all oil company profits....."

Now this week is this little diddy from the new governor of Wisconsin. He has introduced legislation to tax the oil companies 2.5% on all oil earmarked for the state. Here's the kicker, if any company passes along the tax to the consumer those responsible will go to jail.

For the most part, I'm indifferent to the oil companies, they sell me a product I use and as long as that relationship continues I'm OK with them.

But, unlike the average politician, I decided to do some research, so I went to the ExxonMobil website and downloaded their most recent 10Q report (a quarterly SEC filing). Here is their 1st quarter, fiscal '07, Income Statement....

		2006
REVENUES AND OTHER INCOME
Sales and other operating revenue (1) (2)	$	96,268
Income from equity affiliates		1,778
Other income		1,547
Total revenues and other income		99,593
COSTS AND OTHER DEDUCTIONS
Crude oil and product purchases (2)		49,364
Production and manufacturing expenses		7,057
Selling, general and administrative expenses		3,412
Depreciation and depletion		2,730
Exploration expenses, including dry holes		352
Interest expense		281
Excise taxes (1)		7,764
Other taxes and duties (2)		10,163
Income applicable to minority and preferred		292
interests
Total costs and other deductions		81,415
INCOME BEFORE INCOME TAXES		18,178
Income taxes		7,688
NET INCOME	$	10,490

You'll see that the company made roughly 10 billion on 99.5 billion in total revenue a 10.5% net profit margin. That's a lot of money.

But is it? Look at all the excise taxes, duties, and income taxes paid by the company. If you total them, they amount to $25 billion in various payments to governments, a whopping 25% of the total revenue.

So in reality, the state makes more money than the producer, you know, the guy that pays for the equipment, hires the employees, repairs damaged oil rigs, delivers the product, listens to customer complaints, fights frivolous lawsuits, etc.

What does the state do in this equation? Nothing.

Imagine having a convenient store and every Monday, Sal and Tony from the neighborhood stop by to sell you "protection" and they take all the money you earned for that day. That's how the government operates; except Sal & Tony are only getting 14% of your receipts.

I get frustrated with politicians who are getting more brazen in their theft language, indicating to me the average Joe thinks its a good idea to just take money from people who earn it for whatever reason. Well, at least you get good trash pickup from Sal & Tony.