Exxon, Chevron, ConocoPhilips, etc are in the underlined category. Even within their general industry sector, their profits are hardly exemplary. They might make a lot of profit but it's because they are huge companies, not because they are extortionately squeezing the people.
Sector: Basic Materials
| Industry | Profit Margin |
| Silver | 27.30 |
| Industrial Metals & Minerals | 20.40 |
| Copper | 18.20 |
| Oil & Gas Equipment & Services | 14.90 |
| Oil & Gas Drilling & Exploration | 14.60 |
| Independent Oil & Gas | 14.10 |
| Steel & Iron | 13.70 |
| Agricultural Chemicals | 12.60 |
| Gold | 12.30 |
| Major Integrated Oil & Gas | 9.40 |
| Aluminum | 8.50 |
| Oil & Gas Pipelines | 6.10 |
| Chemicals - Major Diversified | 5.80 |
| Oil & Gas Refining & Marketing | 5.70 |
| Synthetics | 4.10 |
| Specialty Chemicals | 3.30 |
| Nonmetallic Mineral Mining | 1.90 |
3 comments:
Sen. Obama's frequent quip that "Exxon made $40 billion, and it won't be easy to get them to disgorge that," is one of the reasons I lost interest in him as a candidate. Either he doesn't understand economics or the economy at all (or at least not in a way that I find at all persuasive), or he's not being honest about how things work.
Even so, do you think we ought to be subsidizing industries with profit margins of 9.40 (or higher, since a lot of subsidies go to the explorers and drillers)? My problem isn't that they're making money - since I have Chevron stock, that's a good thing - but that my tax dollars are basically being given to them as some sort of bizarre welfare payment. If they were an unprofitable but vital industry I could see it, but they're hardly unprofitable, now are they?
I don't have any problem with ending the tax subsidy to the oil companies. I do think it will affect the final price of gas, but subsidies are good for $10 per barrel oil, and nonsensical at $120 a barrel.
Since I don't think we're likely to ever have such cheap oil again because of production constraints, I don't see a need for those subsidies.
I am, however, firmly and adamantly opposed to "windfall profits taxes" on the companies. I think that's a terrible precedent and a really bad idea overall.
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