How Does Big Oil Gouge Us? Let Us Count the Ways
It's not just at the gas pump. The oil companies don't pay much in federal income taxes, either. Over the past five years Exxon has paid at a 3.6% rate (federal tax as a percentage of total pre-tax profits). Chevron was little better at 5.6%. Marathon paid 12%, Conoco Phillips 17%.
They use American research, infrastructure, and national security to make record profits. ExxonMobil, BP, Shell, Chevron, and ConocoPhillips realized a combined 42% increase in profits in the first quarter of 2011. Together, the five biggest oil companies made almost $1 trillion in profits over the past decade.
Goldman Sachs noted that speculation on oil prices is causing the price at the pump to go up. But according to the Huffington Post, the resulting oil company profits "are not finding their way back into the communities from which they came; are not being used to create more jobs; and are not being invested in new equipment and exploration." Instead, the money is going to dividends and stock buybacks. "They're basically enriching themselves," said Daniel J. Weiss, a senior fellow at the Center for American Progress.
The big profits are certainly not being used to create jobs and stimulate the economy, or to pursue alternative energy research. The Wall Street Journal reports that the big five oil firms are holding $70 billion in cash.Meanwhile, they're paying an average of $15 million apiece in annual salaries to their CEOs. Occidental and Chesapeake each paid over $100 million to their CEOs in 2009.
And then we have the continued flow of taxpayer subsidies to the oil industry, totaling about $4 billion a year. We just awarded a $42 million no-bid contract to BP to supply fuel to the Air Force, even as a criminal investigation continues over its Gulf of Mexico ineptitude. Why no-bid? Because the contract was called "an unusual and compelling urgency," which made it a national security issue.
Adding insult to gougery is the attitude of oil company executives, who have apparently convinced themselves of their righteous ways. An Exxon VP referred to his company as "a leading U.S. taxpayer." An American Petroleum Institute spokesman said that "everyday Americans," including teachers and firefighters, benefit from oil industry profits.
What they're saying, in effect, is that it's good not to pay taxes, because that leaves more money to invest in America. Gouging us again, in doublespeak.