Obama’s new boogyman…”big oil”

With the price of gasoline rising by the day, the President has a problem.  People perceive that he can, and should do something about it…now.  Expect to hear the following in the coming months. 

“If you reelect me, I will tax the ‘excessive profits’ made by the oil companies and eliminate all of the subsidies to big oil.”

When you hear this “promise” you need to know the following.

Big oil gets absolutely no tax subsidies.  The closest thing to a subsidy was the $6 billion a year that oil companies received to offset their cost of blending ethanol into gasoline.  That subsidy was ended at the beginning of this year.  Now, you and I will pay for the privilege of of having a less efficient “fuel” blended into our gasoline via higher gas prices.

What “big oil” does get is depreciation expense, as does every other company in this country, and depletion allowances, as do, among others, coal and natural gas companies.  Is the President proposing that we delete all depreciation expense and depletion allowances from our tax code, or just those applicable to “big oil”?

And, what will that do to the price of gasoline?

So, what about what the President will call  “excessive profits”?  The oil companies already pay an effective tax rate of 41% compared to the effective tax rate of 26% for the average of all other companies.

For every dollar taken in by companies, here is a list of their profits:

  • Pharmaceuticals make 22.6 cents per dollar in profits,
  • Computer manufacturers make 21.8 cents per dollar in profits,
  • Beverages and tobacco make 20.1 cents per dollar in profits,
  • Electronics and appliances make 12.6 cents per dollar in profits, and
  • Oil companies make 6.7 cents per dollar in profits.

So, there are no subsidies to big oil, and, big oil’s profit margin pales by comparison to other industries.  But, the scapegoat du jour will now be big oil. 

What else can he say?

 

17 replies
  1. Dimsdale
    Dimsdale says:

    ?bama HAS to make “big oil” a scapegoat, otherwise everyone is going to blame HIM for the surging price of gas at the pump.?
    ?
    If Republicans are smart (and I sometimes wonder), they will pound home the fact that government makes far more off a gallon of gas than the oil companies ever dreamt of, and that every penny is a “windfall”, since they do absolutely nothing to produce, refine or distribute that oil.
    ?
    ?bama deserves every bit of the same blame that Bush got for the 2008 surge in oil prices.

    • Eric
      Eric says:

      You’re right about this one Dimsdale. ?This Administration is the biggest loser we American’s have ever had to deal with. ?Obama is nothing special, though his Marxist roots remind me of a young Fidel Castro. ?He thinks more of himself then he does anything else, and that nasty looking wife of his has Hillary written all over her face. ?It’ll be real nice when these carpet baggers get the boot… and their academic hangers-on too! ?Real pin-heads!

    • antiviceisavich
      antiviceisavich says:

      I agree it is the futures market commodities index funds that are driving prices up. Most of these funds are invested by foreign investors read OPEC countries. So we pay inflated prices for their crude and they in turn invest in commodities driving up their crude. Sweet deal for them.

      • Dimsdale
        Dimsdale says:

        And for that to be true, you have to consider what they “see” in that future.? The actions of different governments, including ours, have a great deal to do with that.??

  2. Marilyn
    Marilyn says:

    Let’s not forget that while Oil companies make about 7-8 cents on a gallon the government makes 47 cents on a gallon.? Did you believe the President when he said that “everyone will play by the same rules”? I didn’t either.? His next sentence was “if?you are in manfacturing, or green energy, you will get a special tax break.?

    • Dimsdale
      Dimsdale says:

      Exactly.? And when you consider the goals of this administration, to get us up to European levels, you have to realize that most of that price increase will come from more government profit, er, taxes.? Yet another windfall for politicians.

  3. andy@american
    andy@american says:

    Seeing how demand is driven by price as well as necessity, Obama’s theory must be that the less oil we use (what he wants) the higher it must be taxed to keep the windfall.? That must make up for the tremendous tax revenue (ha) his green energy technology has produced.

  4. sammy22
    sammy22 says:

    I don’t hear the oil companies complaining much about making 7-8 cents/gal profit (I believe they sell many-many gallons). Why do they need defenders?

    • Dimsdale
      Dimsdale says:

      It isn’t the “defenders”; it is the attackers, and the hypocrisy thereof.? Big oil this and windfall that, and all of it is either a lie, a distraction or an outright fabrication.?? And all for a fraction of what the government confiscates from us in fuel taxes.? Methinks the Democrats should shut their big mouths, but I know it will never happen, because this is red meat for their followers and provides juicy soundbites for their media allies.

  5. sammy22
    sammy22 says:

    Plenty of red meat for the Republicans too. You call it fabrication by the Dems, antiviceivich calls it fabrication by others.

    • Dimsdale
      Dimsdale says:

      Well, I am just looking at the facts: the difference between what the oil company gets and what the government takes is roughly a tenfold difference.? Big government trumps big oil, but big oil is the bad guy (to Dems).? Go figure.

      • Eric
        Eric says:

        We cannot expect the liberal Dem’s to think rationally (consider the Pelosi woman). ?It’s just not possible for them to do so. ?They look at the world so differently then the rest of us, in almost a delusional manor. ?It sometimes seems as though the guy with the least amount of common sense ends up being the leader of the pack. ?I’m convinced that liberal Democrats live in a parallel universe!

  6. socialenemy
    socialenemy says:

    Will Obama attack the oil companies? Of course, he has no one else left to attack. It’s been clear as day since he was elected that he was going to “punish” the oil companies (really us) until he felt they were paying their fair share (everything they make) to the federal government. Whats sad is that we sit here and blame Obame when we KNEW this is what he was going to do. We blame dems when we KNEW this is what they have been doing for two decades. We’ve had two Bush’s and a Reagan in office in as many years as the dems have been tearing down the oil industry and aside from Reagan what did the other two Republican’s do to helps us and what we pay at the pump? Both Bush’s, as far as I can tell, sat on their ass while we paid for their inability to do anything but watch the liberals attack and attack and attack big oil. You want the price of gas to go down? Arguing about Obama on this website isn’t going to do it. Voting out the life time politicians and getting anyone in there who gives a damn is the only way to fix this. What it boils down to is taxes, a broken tax code and the fact that the government has been allowed by EVERYONE to grow to big in the last two decades. Smaller government, lose the current tax code,…

    • Lynn
      Lynn says:

      Socialenemy, Absolutely perfect! We must stop arguing on websites (ok, we still need to argue on RVO, it’s therapeutic) and vote out lifetime politicians. The GOP in me though says we still need DeMint,? both Pauls, Ryan and others who have fought the battle for fiscal sanity. Hint: look at the voting record.

  7. winnie
    winnie says:

    sounds like big pharmaceutical should be the target…you can choose to drive or not drive somewhere to save on gas.? So why isn’t obama going after these pharmaceutical companies for their obscene profit margin when you have grandma and grandpa needing their prescription meds to stay alive?
    So, I guess it’s safe to say that Obama doesn’t just hate big oil, he also hates old people who need Rx meds.? That clears things up nicely.
    ?

  8. Dimsdale
    Dimsdale says:

    There’s no incentive for big government to reduce oil prices when they can blame big oil as the “boogeyman” and still haul in windfall profits that dwarf the profits of the alleged “boogeyman”.?
    ?
    They just keep pointing the finger and pocketing the cash.

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