Should the Gov't Tax Oil Company profits?

[yo mama]

Ummm... no, really it isn't. The Corporate income tax is based on income:

 

Corporate Income Tax Rates--2008, 2007, 2006, 2005, 2004, 2003, 2002, 2000

 

Taxable income over Not over Tax rate

 

$ 0 -- $ 50,000 -- 15%

50,000 -- 75,000 -- 25%

75,000 -- 100,000 -- 34%

100,000 -- 335,000 -- 39%

335,000 -- 10,000,000 -- 34%

10,000,000 -- 15,000,000 -- 35%

15,000,000 -- 18,333,333 -- 38%

18,333,333 -- .......... -- 35%

 

http://www.smbiz.com/sbrl001.html

Your an idiot. ALL corporations are subject to the same corporate income tax rates. Contrary to what O'Reily said, oil companies are subject to the same income tax rates under Section 1 of the IRC as any other corporation in any other industry. The fact that the rate structure is graduated doesn't change that fact. For the most part, corporations pay a 35% rate. Only corporations earning under $10,000,000 pay less, and most businesses with $10,000,000 of taxable income are set up as partnerships, S-Corps, or LLC taxed as partnerships because its not very efficient for smaller companies to pay the double taxation that goes along with the corporate form. How many oil companies do you know of earning less than $10,000,000 in taxable income?

[Ursa Majoris]

Your an idiot. ALL corporations are subject to the same corporate income tax rates. Contrary to what O'Reily said, oil companies are subject to the same income tax rates under Section 1 of the IRC as any other corporation in any other industry. The fact that the rate structure is graduated doesn't change that fact. For the most part, corporations pay a 35% rate. Only corporations earning under $10,000,000 pay less, and most businesses with $10,000,000 of taxable income are set up as partnerships, S-Corps, or LLC taxed as partnerships because its not very efficient for smaller companies to pay the double taxation that goes along with the corporate form. How many oil companies do you know of earning less than $10,000,000 in taxable income?

How can Reilly's claim of 45% or whatever it was be true when the absolute max is 35% for the great majority of Exxon earnings?

[yo mama]

How can Reilly's claim of 45% or whatever it was be true when the absolute max is 35% for the great majority of Exxon earnings?

The only federal taxes that have rates that high are the estate and gift taxes. So the 45% tax rate claim is dubious. Now, when you factor in many state income taxes the combined rate will obviously be higher than 35% (though state taxes are a deduction on the companies federal return). But I'm not sure if that's what he was getting at.

[Perchoutofwater]

The only federal taxes that have rates that high are the estate and gift taxes. So the 45% tax rate claim is dubious. Now, when you factor in many state income taxes the combined rate will obviously be higher than 35% (though state taxes are a deduction on the companies federal return). But I'm not sure if that's what he was getting at.

 

You could probably get there when you consider state and local taxes as well as taxes on dividends.

[TheShiznit]

Tax Benefits

 

Government directly subsidizes oil consumption through preferential treatment in tax codes. A multitude of federal corporate income tax credits and deductions results in an effective income tax rate of 11% for the oil industry, compared to the non-oil industry average of 18%. If the oil industry paid the industrywide average tax rate (including oil) of 17%, they would have paid an additional $2.0 billion in 1991. Our results are consistent with a report by the Alliance to Save Energy that estimated the benefits of individual federal corporate income tax provisions. Their results showed that in 1989 preferential treatment yielded $1.8 billion to $4.6 billion in individual income tax benefits to the oil industry (Koplow, 1993).

 

At the state and local levels, sales taxes for general revenues on petroleum products are lower than the average sales tax rates, and consequently, motorists underpay for general government services. (Sales taxes are charges on petroleum products above user fees [highway fuel taxes, tolls, and fees earmarked for infrastructure and services] that are used for general revenues.) Another study by the Alliance to Save Energy found that state and local governments taxed gasoline at about half the rate as other goods -- approximately 3% versus 6% (Loper, 1994) -- resulting in an estimated $2.7 billion revenue loss from gasoline sales alone in 1991. When home, industry, and office petroleum products are included, the total state and local revenue loss sums to $4.1 billion.

 

Nothing has changed to this day regarding how oil companies are treated under the tax code.

 

Source

[Codwagon]

How can Reilly's claim of 45% or whatever it was be true when the absolute max is 35% for the great majority of Exxon earnings?

 

 

Exxon operates all over the world. I would guess the 45% is Exxon's ultimate worldwide effective rate.

[bushwacked]

Rep. Maurice Hinchey, D-N.Y has now also expressed a desire to nationalize the oil industry. The secret is out... this is what the Democrats want.

 

 

Meh...Republicans will continue to attack Dems who consider nationalization because its an easy target and politically expedient. Most Dems will outright and publicly disown the idea. Methinks you are easily influenced by Rush style fear mongering.

[yo mama]

Exxon operates all over the world. I would guess the 45% is Exxon's ultimate worldwide effective rate.

But they get a foreign tax credit for all foreign taxes paid, which can be used to offset US taxes. So its not like they have to pay twice. While some jurisdictions do have rates of tax higher than our 35% rate, the disparity between the higher foreign rate has to exceed domestic taxable income before things get out of whack to the point where the corporation's effective, worldwide tax rate exceeds 35%. But its not uncommon for global corporations to have a surplus of foreign tax credits, so it does happen.

[yo mama]

You could probably get there when you consider state and local taxes as well as taxes on dividends.

Yeah, I'm mentioned state taxes above. But most big companies pay state taxes, just like Big Oil does. As far as dividends go, corporations still pay tax on those at a 35% rate... unless its the dividends are paid by a subsidiary in which case the dividends are subject to a lower rate of tax, or no tax at all (depending on the ownership percentage of the entity receiving the dividends).

 

The only way O'Reilly's comments make any sense is if he's comparing Big Oil to a small business that does not pay state income tax because it operates exclusively in a state that doesn't have a state income tax, like Texas or Nevada.

[AtomicCEO]

Rep. Maurice Hinchey, D-N.Y has now also expressed a desire to nationalize the oil industry. The secret is out... this is what the Democrats want. And I can guarantee that if they were to gain control of the US oil industry, our price per gallon of gas would sky-rocket even more... the Democrats would ration oil as a way to control us and force us to use public transportation and reduce urban sprawl. Sorry, but I prefer capitalism and personal liberty.

 

Lousy dirty dems! They suck so much! I hate them all! Why do they want to force you onto a bus like some kind of Nazi prison camp???

 

I guess you'd better make that decision to vote for McCain now... the alternative is hell on Earth, for Christ's sake!

[AtomicCEO]

How can Reilly's claim of 45% or whatever it was be true when the absolute max is 35% for the great majority of Exxon earnings?

 

I would be shocked if he said something that wasn't true to try to sway public opinion.

[Savage Beatings]

Meh...Republicans will continue to attack Dems who consider nationalization because its an easy target and politically expedient. Most Dems will outright and publicly disown the idea. Methinks you are easily influenced by Rush style fear mongering.

 

Lousy dirty dems! They suck so much! I hate them all! Why do they want to force you onto a bus like some kind of Nazi prison camp???

 

I guess you'd better make that decision to vote for McCain now... the alternative is hell on Earth, for Christ's sake!

 

This isn't just some columnist pining for Socialization. These are elected officials who are interested in stripping away freedom for the sake of the State. You guys can put your heads in the ground and call it fear mongering if you like, but I'm not going to be afraid to stand up to them and say F that noise!

[Azazello1313]

Meh...Republicans will continue to attack Dems who consider nationalization because its an easy target and politically expedient. Most Dems will outright and publicly disown the idea. Methinks you are easily influenced by Rush style fear mongering.

 

so not being fond of the idea of socializing a massive industry = politically expedient fear-mongering.

[SEC=UGA]

Your an idiot. ALL corporations are subject to the same corporate income tax rates. Contrary to what O'Reily said, oil companies are subject to the same income tax rates under Section 1 of the IRC as any other corporation in any other industry. The fact that the rate structure is graduated doesn't change that fact. For the most part, corporations pay a 35% rate. Only corporations earning under $10,000,000 pay less, and most businesses with $10,000,000 of taxable income are set up as partnerships, S-Corps, or LLC taxed as partnerships because its not very efficient for smaller companies to pay the double taxation that goes along with the corporate form. How many oil companies do you know of earning less than $10,000,000 in taxable income?

 

Dude, I'm not going to cast any aspersions at you because you are obviously suffering mental distress under the rule of this oppressive Republican admin and this makes you lash out, often times in an irrational manner, at those with whom you disagree. That and I don't want to get this thread locked down.

 

You can make all the arguments that you want to the contrary, the simple fact is that corporations are subject to a graduated tax system, thus they do not all pay the same rate, to assert otherwise is a falsehood.

 

And it should be "You're an idiot".

[bushwacked]

so not being fond of the idea of socializing a massive industry = politically expedient fear-mongering.

 

 

The fact is that even amongst democrats only~35% believe that the oil industry should be nationalized. If Savage's post wasn't the result of politically expedient and effective fear-mongering then what is?

 

Typical.

Edited June 19, 2008 by bushwacked

[yo mama]

You can make all the arguments that you want to the contrary, the simple fact is that corporations are subject to a graduated tax system, thus they do not all pay the same rate, to assert otherwise is a falsehood.

Sooooo, that means oil companies are subject to the same rate structure as any other company. And would pay at the same rate as any other company earning the same amount of taxable income. Which is to say that they don't pay any higher or lower rate of taxation by virtue of being an oil company. So for Mr. O'Reilly's comment to have any semblance of truth to it, he'd have to of been comparing Big Oil to companies with taxable income to corps with less than $10mm in taxable income. The Big Oil companies earn income in the Billions - with a "B" - so comparing them to corps with income of less than $10mm is like comparing mountains to mole hills.

 

Reason #2 we know O'Reilly was lying: he stated the "industry average" tax rate was 30%. The only corporations with a tax rate that low earn less than $100,000 of annual taxable income. Year 2005 (the most recent year IRS stats are available in this regard) reveals that only 0.004542% (or less than one-half of one percent) of all corporate receipts were reported on corporate returns showing $100,000 of receipts or less. O'Reilly lied.

 

And while I'm not fan of this current administration, my only ax to grind is with people who make false or purposefully misleading statements.

Edited June 19, 2008 by yo mama

[Perchoutofwater]

Yeah, I'm mentioned state taxes above. But most big companies pay state taxes, just like Big Oil does. As far as dividends go, corporations still pay tax on those at a 35% rate... unless its the dividends are paid by a subsidiary in which case the dividends are subject to a lower rate of tax, or no tax at all (depending on the ownership percentage of the entity receiving the dividends).

 

The only way O'Reilly's comments make any sense is if he's comparing Big Oil to a small business that does not pay state income tax because it operates exclusively in a state that doesn't have a state income tax, like Texas or Nevada.

 

I wonder what he property tax is on a refinery? Texas has more refineries than any other state, and the refineries in Texas have a much larger capacity than most others. We know that since Texas doesn't have a state income tax, they have a very high property tax.

[yo mama]

I wonder what he property tax is on a refinery? Texas has more refineries than any other state, and the refineries in Texas have a much larger capacity than most others. We know that since Texas doesn't have a state income tax, they have a very high property tax.

As far as the percentage of taxable value, you're 100% correct. As far as the gross dollars a homeowner pays per square foot/acre, etc., its not that bad compared to other geographies. For business, I honestly don't know. But I do recall from my years in Texas that the counties were always trying to squeeze business, rather than homeowners, when it came time to raise more money for schools.

 

If we're to roll all taxes into the comparison I'd be curious to see how the figures fell out. But a windfall profits tax is purely a federal income tax issue, and the IRS doesn't really care what our state and local tax responsibilities are. And it shouldn't have to: its at the top of the pecking order in terms of priority of revenue collection.

[SEC=UGA]

Sooooo, that means oil companies are subject to the same rate structure as any other company. And would pay at the same rate as any other company earning the same amount of taxable income. Which is to say that they don't pay any higher or lower rate of taxation by virtue of being an oil company. So for Mr. O'Reilly's comment to have any semblance of truth to it, he'd have to of been comparing Big Oil to companies with taxable income to corps with less than $10mm in taxable income.

 

Reason #2 we know O'Reilly was lying: he stated the "industry average" tax rate was 30%. The only corporations with a tax rate that low earn less than $100,000 of annual taxable income. Year 2005 (the most recent year IRS stats are available in this regard) reveals that only 0.004542% (or less than one-half of one percent) of all corporate receipts were reported on corporate returns showing $100,000 of receipts or less. O'Reilly lied.

 

And while I'm not fan of this current administration, my only ax to grind is with people who make false or purposefully misleading statements.

 

No they are not subject to the same rate as ANY other company. Yes they would pay the same tax rate as any other corporation with income over 10,000,0000. They do not pay a higher rate than other companies with similar incomes due to the industry in which they practice. This was not your argument.

 

His comparison was to "all industry".

 

This is his quote "Our tax rates last year were at 45 percent, compared with in the 30s for the average of all industry". "in the 30's" is not 30. He may be being disingenuous by possibly calculating his unknown other taxes into his number and possibly excluding them from those of other companies. And he is actually fibbing a little bit, from what I can discern from their Income statements on the web, they paid total income taxes of 41.92% ( and I am assuming this would include state income taxes and possibly some deferred or other taxes)

 

I have made no misleading statements in any thing I have posted.

[Savage Beatings]

 

The fact is that even amongst democrats only~35% believe that the oil industry should be nationalized. If Savage's post wasn't the result of politically expedient and effective fear-mongering then what is?

 

Typical.

 

Good Lord bushwacked! Every U.S. citizen should be shocked and alarmed that over 1/3 of your party wants to do this! I'm sure it's nothing to worry about if you yourself are a Marxist, but for those of us who still believe in freedom and opportunity in America, this is unacceptable!

 

I guess technically you are correct. I am indeed afraid of this coming to fruition. Too many influential people in elected positions of power want to bring about these changes. Too not be afraid of it is to be willfully myopic.

[bushwacked]

Good Lord bushwacked! Every U.S. citizen should be shocked and alarmed that over 1/3 of your party wants to do this! I'm sure it's nothing to worry about if you yourself are a Marxist, but for those of us who still believe in freedom and opportunity in America, this is unacceptable!

 

 

Tha's impressive bravado but the mainstream opinion on voters who favor nationalization is at 29%. So, regardless of it being a good or bad idea, the democratic view on this is much more aligned with mainstream America than the Republican view is. I think it is much ado about nothing because the support isn't there from the public or the policy makers.

[Pope Flick]

Good Lord bushwacked! Every U.S. citizen should be shocked and alarmed that over 1/3 of your party wants to do this! I'm sure it's nothing to worry about if you yourself are a Marxist, but for those of us who still believe in freedom and opportunity in America, this is unacceptable!

 

I guess technically you are correct. I am indeed afraid of this coming to fruition. Too many influential people in elected positions of power want to bring about these changes. Too not be afraid of it is to be willfully myopic.

 

 

Were you around like this during the torture debate? That's pretty much how I felt. We wear the shame of Jose Padilla and history will not be kind on that account.

 

Big Oil and their political allies have screwed us, and screwed us good. I'm already mentally prepping myself for 6 dollar a gallon gas by this time next year, regardless of who is president.

 

Instead of sounding alarmist, ask yourself WHY as you say 1/3 of one of the major political parties wants to do this. Is it an over reaction, or is the situation that extreme? Unless you think 5 dollars a gallon isn't extreme I could perhaps see where you're coming from. But something is seriously wrong, and shouting down a prosed solution without endorsing one yourself doesn't get much traction with me. If you don't see a problem at the moment, then I'm as baffled as you are but for completly different reasons.

[AtomicCEO]

Too many influential people in elected positions of power want to bring about these changes. Too not be afraid of it is to be willfully myopic.

 

Oh my god! You're worried about the politicians who are against Big Oil!

 

Don't worry. They are easily outnumbered. That's from 2005... before 2 years of record-shattering profits.

 

Is it good for America that a single corporation spends 367 million on influencing our elected officials in two years, and ends up with 11.6 billion dollars of my money?

 

That's free market. That America, Apple Pie, and Elvis.

 

Hmmm... is it possible that the free market sometimes leads to corruption and needs to be regulated? Perhaps. Perhaps.

[Azazello1313]

Is it good for America that a single corporation spends 367 million on influencing our elected officials in two years, and ends up with 11.6 billion dollars of my money?

 

something tells me you're not quite worth that much

[AtomicCEO]

something tells me you're not quite worth that much

 

My mom says I'm worth a billion dollars.