Exxon Is Doing A Good Job
Exxon is one of the most hated corporations in the world, but is it to blame for the high gas prices?
With oil pushing well over $110 a barrel there isn’t much of a positive
view of oil companies. It is natural for humans to want to find blame
and put it on someone, but are the oil companies really the ones to
blame? Or are they the ones that are put in the difficult position?
Exxon’s profits are breaking records. This happens because they’re
dealing with a global product in US dollars, which has been losing
value. The only thing going up faster than Exxon’s profits are the
taxes they’re paying. In 2006 Exxon payed $28 billion in taxes and in
2007 it payed $30 billion in taxes.
The amount of taxes may not seem like much, but when you factor in how
much Americans pay, it becomes staggering. Looking at the latest IRS
data released(which is 2004), the bottom 50% of American tax payers
payed only $27 billion in taxes. This means Exxon, which is just one
business, pays more taxes than the bottom 50% of American tax payers.
That is significant for just one business to pay that much. The idea of
a windfall tax is just an immoral thing to do.
Here is why gas costs more…
- The US Greenback has been going down in value for the last few
years. Oil is a global product, so it requires more US dollars to buy
the same amount of oil. That’s just simple economics. T - In this
country and other countries around the world, there is prohibition on
drilling where there are huge sums of oil. In America, this would
include Arctic National Wildlife Refuge and in places on the Gulf of
Mexico. This leaves oil companies with less oil to produce, which
drives the price of oil up. - Most of the countries in the
world that contain high amounts of oil have unstable governments. That
prevents investment into developing these oil reserves. Most of the
Middle East and Africa are unstable. In Venezuela, President Chavez had
the military steal oil companies oil fields and equipment in a sneak
nationalization. This means there will be no international investment
in these oil fields, leaving them under performing. - Due to
environmental regulations there hasn’t been a refinery made in America
for turning oil into gas, in the last 30 years. The demand for gas up,
but our ability to create it hasn’t increased. - Putting ethanol
in gas requires that there is enough ethanol produced to meet the 5.9%
margin. This means when the production of ethanol isn’t strong, the
price of gas goes up. - Taxes on gas at the pump are a percentage of what you pay for
it, not flat. Therefore as gas prices go up, you’re going to pay even
more in taxes. - The taxes payed by oil companies leave them with less money for investing in research and development of new oil reserves.
These are the reasons oil prices are high and why we’re paying for it
at the pump. We shouldn’t blame oil companies like Exxon because
they’re doing a good job. With all the capital, investing, distribution
and government red tape , these businesses are doing a great job.
About the author
Tags: american tax payers, arctic national wildlife, arctic national wildlife refuge, breaking records, exxon, global product, greenback, gulf of mexico, irs data, national wildlife refuge, oil co, oil companies, oil reserves, payed, president chavez, price of oil, simple economics, unstable governments, venezuela president, windfall tax
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