Profit and taxes
57Taxes paid by Exxon Mobile
If you only read the news report of the earnings for Exxon Mobile you will see the headlines that they made a record Profit again. What is not reported is the tax paid. In the third quarter, only, they paid $11,327,000,000 (yes Billion) in taxes and have paid $31,155.000.000 (Billion) for three quarters. You have to search to find these figures but I did find a web site.
http://www.marketwatch.com/news/story/Exxon-Mobil-Corporation-Announces-Estimated/story.aspx?guid=%7BA63943DA-E545-4814-A746-FE8941636B72%7D
Some interesting information is:
Total revenues and other income 137,737
Total costs and other deductions 111,580
Income before income taxes 26,157
Income taxes 11,327
Net income (U.S. GAAP) 14,830
Based on these figures Exxon Mobil pays an income tax rate of 43.3039%. This is figured by taking the income tax paid and dividing it by the Income before taxes. You would take $11,327 Billion divided by $26,157 Billion this give you the tax effective tax rate. This is yet another example of the media being anti business. Part of this is because they don’t understand how business works. The other thing that is not reported is that the after tax profit now becomes pre tax income for the people who own the stock and this will be taxed again either as income or capital gains.
Who are the people are enjoying the profits from the oils companies? The answer is the people who own the stock in the oil company. If you want to share in the profits you can buy one share of Exxon Mobil for today’s (12/01/08) price of $77.46 (US Dollars). After investing that amount with Exxon Mobil you are a share holder in the company. When you buy stock in a company you are saying that you believe that the company will make a profit and share that profit with you. You are taking a risk because the company could lose money and the stock price fall. If the price of the stock falls to $60.00 a share then you have lost $15.05 for each share you own if you sell at that time. However if the company discovers a new way to make gasoline so that there is a 0 carbon footprint and everyone wants to buy that gas the value of your stock goes up to $105.00 a share you have made $30.00 if you sell at that time. With stock you also make money when the company pays a dividend at the end of the year. In this case Exxon made $2.86 per share of which they declare a dividend of $0.40 , per share. This dividend is considered income to the person owning stock in the company. With the company issuing 5.06 billion shares that means that the company will pay out a total dividend of $2.024 Billion Dollars to the Shareholders, who will pay income tax on that money. With a tax rate of 10% to 35% the government will collect additional taxes of between, $202,400,000.00 and $708,400,000.00.
The next time the media reports that a company has reported a huge profit remember that the government has been in there and taken their part and in the case of Exxon Mobil that part is close to one half of the money they make. The shareholders take the risk and the government enjoys the rewards of their risk.
PrintShare it! — Rate it: up down flag this hub
Profit and taxes in the News
- With Death and Taxes, Timing Is AllNew York Times30 hours ago
With the one-year repeal of the estate tax, 2010 may be a good time for those with substantial assets to cross that bridge — for one’s heirs, at least.
- Budimex Sees Higher Profit on Polish Building Boom (Update1)Bloomberg19 hours ago
Jan. 5 (Bloomberg) -- Budimex SA , Poland’s second-largest construction company, predicts sales will rise by as much as 20 percent this year and operating margin will widen as the country builds more roads before the 2012 European soccer championships.
- Equal Taxes for Private Equity?New York Times2 days ago
Hedge fund managers and private equity partners are merely beating the system when they pay lower tax rates than their own secretaries and janitors, The Boston Globe says in an editorial.
Chuck says:
13 months ago
Excellent Hub. Here is another statistic that I pointed out in responding to a comment on my Hubs dealing with taxes ( http://hubpages.com/hub/Democrat_vs_Republican_Tax ). You say that over the course of the last three quarters of 2008 Exxon Mobil paid $31+ BILLION but according to a January 29, 2008 article in the ultra leftwing New York Times ( http://www.nytimes.com/2008/01/29/washington/29ear ) our elected representatives in Congress currently waste $20 BILLION per year on earmarks which means that in the course of a year the taxes on Exxon's profits amount to twice what even the New York Times considers to be wasteful spending by our politicians. This averages out to $37,383,177 worth of wasteful spending per Congressman and Senator and that is using the New York Times' extremly low defination of "waste" (the Times generally favors most Federal spending). If we were to use a definition of "wasteful" spending as viewed by a more reputable organization, such as the National Taxpayers Union, we would find that Exxon's taxes don't begin to cover what Congress wastes.