A friend of mine recently emailed me a link to a website on the "profits" that Exxon Mobil makes. His subject headline read, "we should keep giving them tax breaks". He was, of course, being sarcastic with his subject and was implying that it's ludicrous to give such a huge, powerful corporation additional tax breaks. He feels, I think, that we should be taxing them more. After all, they are evil. Tsk, tsk.
It just so happened, though, that on my way to work this morning, I was listening to conservative talk radio and this very subject came up. The host made the point that Exxon Mobil has been paying more tax very much in line with the increased revenues. Makes sense, right? You make more money, you pay more taxes.
I checked it out online and this is what I found. Exxon Mobil's earnings before tax in 2006 was $67.4 Billion (this is total revenue). That year, they paid out $27.9 Billion in taxes. That's a 41% tax rate. The same rates held true for 2007. The highest personal income tax rate is currently 35%. I'd say their tax rate is more than fair.
The fact is, Exxon Mobil is a GLOBAL company, and does business in many countries. Oil, as it turns out, is in high demand, and not just by the United States. China and India have increased their consumption of oil exponentially over the past two decades. Simple economic theory dictates that prices go up. So while I do feel it (and I mean personally) at the pump when gas is $4 / gallon, I can't blame the oil company. I blame myself for not investing in a car that doesn't use gasoline. I'd like my next car to be run completely on electricity. If you want to really stick it to the mean, evil corporations, don't buy their products. But don't increase their tax rate because they actually make a profit. That sounds a lot like Communism to me.