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Tax Cheat Timmy Speaks on Taxes for Oil Companies
Tax Cheat Tim Geithner opens his mouth to defend Obama's new proposed policy which the administration says will reduce corporate income tax rates but take away the subsidies for oil and gas companies.
Of course the first thing thinking Americans might notice is the current constant rising price of gasoline at the pumps and consider whipping the oil companies at this moment might not be a great idea.
Back to Tax Cheat Timmy. Geithner defends Obama's proposal with these wonderful words of wisdom:
"The effective tax rate on the energy industry in the United States today is much, much lower than the average. It's lower because the tax code provides a substantial amount of subsidies to those private companies. We propose, for lots of reasons, mostly because we think it's fair and more efficient, to dial some of those back."We've heard an awful lot about fairness from this administration and of course it sounds so good to the masses. Everyone wants to be fair! And of course we all believe that everyone should pay their fair share. Of course those beliefs don't explain why 49% of Americans don't pay a dime in income tax and a good portion of those 49% of non-income tax paying individuals actually get a check from the IRS from monies paid in by someone else!
But back to fact checking Tax Cheat Timmy. The average top 20 large corporation pays just over 25% in US income taxes. So what about those giant evil oil companies?
America's three biggest oil companies, ExxonMobil ( XOM - news - people ), Chevron ( CVX - news - people ) and ConocoPhillips ( COP - news - people ), all endure income tax burdens of more than 40%--higher than the statutory U.S. rate of 35%. Exxon, with a 45% rate, tallied $21.6 billion in worldwide income taxes for 2010Oh Dear! Over 40% paid in taxes sure sounds higher than the average top 20 corporations at 25%. But then Tax Cheat Timmy never was really good at math. Maybe it's just another Turbo Tax problem.
One more point. When Barack Hussein Obama raises the taxes paid by oil companies by taking away subsidies, what do you think will happen to gas and oil prices? Do you believe ExxonMobil, Chevron, and ConocoPhillips will decide to just take the lower profits and continue business as usual? Perhaps they will lower their top echelon's salaries and bonuses? If you guessed that gas and oil prices will go up, you actually may understand corporate behavior and economics.
Now if you really want to understand what's happening in the Obama administration, you might want to investigate why General Electric (owner of some in the tank for Obama television stations) paid in corporate taxes.
Contrary to what many in the public seem to think, the conglomerate did pay taxes in 2010. It reported $2.7 billion in cash tax payments during the year, and on its income statement lists a provision for income taxes of $1.05 billion. Considering GE's pretax income of $14.2 billion, that makes for a tax rate of just 7.4%.Hmmmmm.