This Just In...
Kevin Fischer is an award-winning veteran broadcaster who has been seen and heard on Milwaukee TV and radio stations for nearly three decades.
Kevin, who is a legislative aide to state Sen. Mary Lazich (R-New Berlin), can be seen offering his views on the news on the public affairs program, “InterCHANGE,” on Milwaukee Public Television Channel 10, and heard filling in on Newstalk 1130 WISN. He lives with his wife, Jennifer, and their baby daughter, Kyla Audrey, in Franklin.
The truth about "Big Oil"
By Kevin Fischer
Friday, Jun 13 2008, 06:15 PM
Earlier this week, Republicans in the U.S. Senate managed to block an effort by Democrats to impose a 25 percent tax on any "unreasonable" profits of the five largest U.S. oil companies.
The tax, if enacted, wouldn’t have lowered gas prices by one cent. Oil companies surely would have passed the expense onto consumers in the form of higher gas prices.
Democrats tried to exploit the current public outrage over fuel costs to ram through another tax increase disguised as the little guy sticking it to those big, bad, evil oil giants.
The truth needs to be told about “Big Oil.”
Jeff Jacoby is a fine conservative columnist for the Boston Globe. In a recent column, Jacoby writes:
“We've been down this road before. Under a windfall tax signed into law by Jimmy Carter, domestic oil production plummeted by an estimated 795 million barrels, while imports of foreign oil surged. Congress had anticipated windfall tax revenues of $393 billion. The actual take: just $80 billion. Like so much else associated with the Carter era, the windfall-profits tax was a counterproductive flop. Do Democrats really believe a new dose of Carternomics is going to make today's economy stronger?
If you want to see a real windfall, take a look at what Big Oil pays in taxes. The 27 largest US energy companies forked over $48 billion in income taxes in 2004, $67 billion in 2005, and more than $90 billion in 2006 - an 87 percent increase. Since 1981, the Tax Foundation calculates, the oil industry has earned a cumulative $1.12 trillion in profits - but it paid a cumulative $1.65 trillion in taxes (add another half-trillion to account for taxes paid to foreign governments).
For most of the 25 years between 1981 and 2006, says foundation president Scott Hodge, taxes collected from oil companies by federal, state, and local governments were nearly double the industry's profits in any given year. For all the clucking over ExxonMobil's $10.9 billion in profits last quarter, little attention was paid to its total tax bill in the same period: more than than $29 billion.
So who's the real ‘profiteer’ - Big Oil or Big Brother? And who is likelier to keep energy abundant - the profit-seeking entrepreneurs who pull it from the ground, or the politicians who demonize them when they succeed?”
Columnist Bill Steigerwald also commits a flagrant act of journalism in a piece following testimony on Capitol Hill by oil company executives:
“Many Americans have heard by now the truth that oil companies pay far more dollars in taxes each year than they earn in profits. And that the oil industry's average net profit margin -- 8.3 percent last year -- is lower than Big Tobacco and Big Beverage (19.1 percent), Big Pharma (18.4 percent) and Big Banking, Big Insurance and Big Media.
But during their show trial, the execs delivered some other pertinent facts in their defense:
* U.S. companies, while huge, are actually relatively small players in a gigantic global oil market. They can compete directly for only 7 percent of available reserves while large government-owned companies like Petroleos de Venezuela own and control 75 percent of world supply.
* As Stephen Simon of ExxonMobil humbly pointed out, his hated behemoth -- America's largest oil and gas corporation -- accounts for only 3 percent of global oil production and 6 percent of global refining capacity. It has only 1 percent of global petroleum reserves - 14th in the world.”
And one more.
An excellent guest column by Al Smith in this week’s Journal/Sentinel.
