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Edited on Tue Aug-05-08 10:18 AM by George_Bonanza
"The company has spent a substantial amount of capital and resources to create that kind of profit, and it's outrageous for some government bureaucrats to decide that it's too much profit. We live in a system that is built on the capitalist model: profit is a good thing. Aside from the moral implications of a "windfall profits tax," there are also practical consequences. Exxon Mobil employs over 100,000 people. Hurt the company, you hurt the employees. If you hurt the company, you also hurt those who are invested in the company. Millions of people own stock in the top oil companies, and that includes middle-class individuals and retirees. Why should we punish them for investing in a profitable company?
Additionally, it's smart to look at more than just the sensationalist headline "$12 billion made by big oil company!!!" If you look at the quarterly report, Exxon didn't even make most of its money in the United States. They made about 80% of it outside the United States. You might find this next fact surprising. As I'm sure you know, oil companies usually classify net incomes as coming from either "downstream" sources or "upstream sources." The downstream portion of the company's activities include refining, transporting, and retailing the finished product (gasoline, heating oil, natural gas, etc.). When you compare the 2Q07 and 2Q08 numbers on Exxon's US downstream net income, you see that they were actually 83% lower this year, which seems to contradict the screams about the company ripping off US consumers and needing to be taxed heavily.
Sen. Obama's whole scheme is nothing more than populist pandering. That fits right in with another ineffective economic policy being trotted out this year: protectionism."
I don't know much about economics, so how can I counter a statement like this?
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