[casinobonusa]

Thank you for answering Iron. Everyone else is afraid. The questions was not about how wealthy one should be, or should want to be. 401(k)'s aren't going to make you wealthy. My point was that when it comes to your own investments, of course you want to make as much as you can. So why should it be any different for a corporation who has a responsibility to its investors and its employees. 10% for a mutual fund these days is only average. The answer should have been; "I'd look into higher yielding funds".

I agree not all executive benefits are deserved. Neither are all regular workers. I'm sure the mid-grade employees of Exxon benefited also with stock bonuses/options/offerings they probably receive in their benefits package. Complete speculation on my part but at the minimum, Exxon matches their 401(k) contributions.

I don't think that I should be afraid... I mean... what is there to fear on here? But when you have oil prices that high and the companies are profitting from it while the main source of our oil is coming from the same country where people are dying, it kinda drains the excitement from that excessive profit, except from the business and its investors of course. OPEC is only screwing the US consumer in raising the price of crude, but gives the company a higher profit margin because the prices are higher than what it used to be years ago. The problem is price inflation depletes the value of the dollar and so the prices rise, thus WE who put gas in our cars every week pay for it. There goes half your investments each year - back into EXxon/Mobile's profit, in which you only get a certain amount of share back.

As far as 401K, Exxon is able to match contributions, like most companies, because it is tax deductable for them.

Think of it as a clothing store that gives its employees a 20% discount on all clothing in the store. An employee gets his check and spends some money in the store. That store makes money back from the employee regardless.

[MegaJIT]

Since no one picked up on it, or bothered to think about it, I'll finish this thread for you. Exxon's "record" is only in dollar amounts. Their profit is 10% of their revenues. Not even close to a record but big media (who's profit margins regularly far exceed Exxon's) would have you believe this is big news.

Since the "big media" is owned by corporations about the same size as Exxon I don't see why you're giving them a bad time.

[Peterli]

Out of curiosity, do those of you who talk about "record profits" with a tone of indignation think that profit should be capped for corporations? If so, would it be a gross dollar value, or a percentage of the company's revenues? Or, should it be some combination (i.e. to prevent small startups from being penalized)?

Personally, I don't like the idea, but I'm curious to hear from people who might.

[casinobonusa]

I think in cases of a commodity like energy and car insurance (whereas there is no competition and it is a state law to have it) there should be a cap.

[RG3rGWcA]

My indignation with the Big Oil record profits is only that the Bush administration is giving them subsidies during a time of record deficit.

[beethyday]

Never heard "car insurance" described as a "commodity" before. Given the wide variety of coverages available, I can't see how it passes the interchangability test.

Since there are plenty of companies who insure cars (I'm sure you've seen the ads), how do you reconcile that with the idea that there is "no competition"?

The fact that CI is a state requirement doesn't mean that there is no competition within the industry - the same logic regarding "requirements" can be used to make the argument that there is no competition in the food industry because we're all required to eat, or that there is no competition in the fashion industry because social mores frown upon nudity, therefore requiring all of us to dress.

[cepAceryTem]

I don't think that I should be afraid... I mean... what is there to fear on here? But when you have oil prices that high and the companies are profitting from it while the main source of our oil is coming from the same country where people are dying, it kinda drains the excitement from that excessive profit, except from the business and its investors of course. OPEC is only screwing the US consumer in raising the price of crude, but gives the company a higher profit margin because the prices are higher than what it used to be years ago. The problem is price inflation depletes the value of the dollar and so the prices rise, thus WE who put gas in our cars every week pay for it. There goes half your investments each year - back into EXxon/Mobile's profit, in which you only get a certain amount of share back.

As far as 401K, Exxon is able to match contributions, like most companies, because it is tax deductable for them.


Think of it as a clothing store that gives its employees a 20% discount on all clothing in the store. An employee gets his check and spends some money in the store. That store makes money back from the employee regardless.

I assume you are referring to Iraq. While they have over 10% of the worlds known reserves (does that answer the questions as to why we find them strategically important and why we cannot leave them to our enemies?) they produce only about 2 million barrels a day and export a little more than half that amount. That's what SA has cut in their production over the last six months. That barely runs my petroleum sucking toys much less be our main source of oil.

I'm not trying to be condescending (okay maybe a little but in a nice way) but thanks for the lesson on inflation. Here's the thing...if inflation is around 2.5% per year, but my investments make me over 10% per year, I'm way ahead of the game. And that inflation rate is for everything...not just gasoline. Couple that with the fact that I put significantly less gasoline in my toys than I make/invest, then my Exxon profits and income far exceed the extra I have to pay for gasoline. So half my investment profit does not go back to Exxon. Besides, gas prices are very near where they were 2 years ago, pre-Katrina. They are higher but not a whole lot considering. Just over the border from me in South Cacalaca it's $1.88 a gallon.

The 401(k) comment...are you suggesting we get rid of that tax deduction? Companies don't do it because it's tax deductible, they do it to attract good employees. That's how the free market works. And if companies didn't make a profit, how long do you think they would continue a 401(k) match?

[Patgaepx]

Out of curiosity, do those of you who talk about "record profits" with a tone of indignation think that profit should be capped for corporations? If so, would it be a gross dollar value, or a percentage of the company's revenues? Or, should it be some combination (i.e. to prevent small startups from being penalized)?

Personally, I don't like the idea, but I'm curious to hear from people who might.

I agree with you - I don't like the idea of capping profits for corporations. But neither do I like the idea of giving such companies tax cuts. There have been something like $6 billion in tax cuts to the oil industry in the last few years. The energy bill passed by the House would rescind these tax cuts.

[Gerribase]

I don't think that I should be afraid... I mean... what is there to fear on here? But when you have oil prices that high and the companies are profitting from it while the main source of our oil is coming from the same country where people are dying, it kinda drains the excitement from that excessive profit, except from the business and its investors of course.

Iraq is the "main source" of our oil?

You might want to do a bit of research there, IM. We import more than 4 times as much from Canada as we do Iraq.

Matt

[popandopulus]

Good for them. It's obvious they didn't need that tax cut in 2004 that a lot of people were trying to justify.

[Gerribase]

My indignation with the Big Oil record profits is only that the Bush administration is giving them subsidies during a time of record deficit.

Hmmm. It seems from these folks that a significant portion of the subsidies to the oil industry (~30%) is for alternative fuels.

Best we cut that out, right?

Matt

[Gerribase]

Oh, yeah - and the tax credits aren't exactly a Bush administration invention:

http://www.time.com/time/magazine/ar...167738,00.html

They were around (gasp!) for decades, including in the, ahem, prior administration.

Matt

[popandopulus]

Hmmm. It seems from these folks that a significant portion of the subsidies to the oil industry (~30%) is for alternative fuels.

Best we cut that out, right?

Matt

That kind of sounds like relying on someone that makes a tons of money selling cigarrettes to create a way for people to stop smoking.

I don't think they are as dedicated to alternative fuels as they are to making money. I could be wrong though.

[Gerribase]

Seems some of the alternative fuels work is genuine, and some is less that honest.

Again, though, not a program unique to this administration.

Matt

[Gerribase]

An interesting historical perspective on tax credits and the oil industry:

http://www.net.org/proactive/newsroo....vtml?id=27583

(note: rabid partisans might wish to avoid this article)

Matt

[cepAceryTem]

I agree with you - I don't like the idea of capping profits for corporations. But neither do I like the idea of giving such companies tax cuts. There have been something like $6 billion in tax cuts to the oil industry in the last few years. The energy bill passed by the House would rescind these tax cuts.

Since petroleum, like steel and many other industries, is considered vital to the national security (no brainer) there will always be tax incentives for them. Many of the tax breaks the oil industry recieves are for protection from law suits, exploration, alternative fuels research, defense/protection of international holdings and suspension of royalties. I would say most are justified. That probably leaves only a few billion for the entire industry (not just Exxon) that may be considered unjustified. Okay, so without those tax breaks they made $37.5 billion. Woooo.

Congress is talking about making them pay the royalties they would owe for drilling on public land/water. Think the oil companies are going to just eat that? Is the royalty the McDonald's franchisee pays to McDonald's figured into the price of your happy meal? You bet. It's a tax increase on you and I that the Dems will make the blue staters think they're not paying.

[MegaJIT]

When the oil companies pay royalties and stop receiving tax breaks then the real price of gas will be reflected in the pump price instead of being hidden in the congressional giveaway of the public wealth. That will be better for everyone.

[cepAceryTem]

When the oil companies pay royalties and stop receiving tax breaks then the real price of gas will be reflected in the pump price instead of being hidden in the congressional giveaway of the public wealth. That will be better for everyone.

Higher gasoline prices will be better for everyone? I'm not sure which side of the aisle your on with that comment. At once you are saying let's raise gas prices to their real levels (hurt the poor) while you call the money congress spends the "public wealth"? I'm totally confused.

So while gas prices rose because that was the market at the time, that wasn't okay but if they rise as a direct result of Democratic congressional action, that would be fine by you?

[MegaJIT]

Higher gasoline prices will be better for everyone? I'm not sure which side of the aisle your on with that comment. At once you are saying let's raise gas prices to their real levels (hurt the poor) while you call the money congress spends the "public wealth"? I'm totally confused.

So while gas prices rose because that was the market at the time, that wasn't okay but if they rise as a direct result of Democratic congressional action, that would be fine by you?

Gasoline prices will not rise by one cent. Only the price paid at the time of purchase will increase when we stop hiding part of that cost like we do now.

Oil and gas on public land is certainly part of the common wealth. Giving it away to the oil companies is not good policy. Tax receipts held by congress is also part of the common wealth. Exempting oil companies from paying like other companies is also not good public policy.

[beethyday]

Tim, have you ever read a 10-k?