Saturday, May 14, 2011

Obscene Profit!

Recently, Washington has decided to demonize, and call to hearings the oil companies, because they felt the oil giants weren't paying enough in taxes. You see, politicians decided to label normal tax deductions available to every business and citizen as subsidies, as if they were handouts. Whenever you invest a dollar in the operation of your business, in the attempt to make a taxable profit, it can be deducted from the bottom line. It's neither a tax break, nor a subsidy, it's a written off expense. Let's look at who really collects the cash when oil companies work to gain profit.

First the oil companies must find oil to drill, this requires them to hire scientists who use equipment to locate pockets of oil. The profit made from charging the oils companies for that service, the wages the scientists and support people make are all, TAXABLE.

Then the oil companies must hire people to build and operate oil rigs to bring the product to the surface. All the income made by those employees, all the profit made by the companies who build the rigs, all the profit on metal sold to the manufacturers, and the income derived to produce that metal is,TAXABLE.

Then once the oil is brought to the surface, it needs to be transported. The trucks, boats, pipe, labor, and profit used in this process by those companies is again, TAXABLE!

The crude then arrives at the refineries, where it is made into, diesel, gasoline, fertilizer, plastic products, etc. Those processes, their wages, all the equipment involved is again, TAXABLE!

Those products are then transported to the wholesaler, the trucks, wages for labor, and any profit is again, TAXABLE!

The retailer then gets his hands on the finished product, which he sells to John Q Public. All the labor and the profit is again, TAXABLE.

I know I missed some of the TAXABLE areas in this process, but I think you get the idea. The entity that profits from the exploration, refining, transportation, and resale of crude oil products has one common denominator, it's all taxed by the government. Who actually profits the most from the oil companies efforts? Why are they pointing fingers at them? Could oil products be sold for less if they weren't taxed excessively?

Lastly, who is the villain here?

God Bless!
Capt. Bill


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