A real buzzkill (seriously; the environment dudes)

[Monty3038]

The Middle East is what it is mainly due to oil. Not only do corps like Exxon not pay any taxes, but I think they even get subsidized. That's how insanely powerful they are

Wuf, I agree, that Middle East is all due to Oil, but the fact remains, they have the oil and unless we deal with them, one way or another, we have no oil, so that I don't disparage, the people with the product you want set the price.

As towards us setting policy mostly based on oil, I can see some of that, I mean Vietnam makes no sense for the US unless you realize why we were there... and what we have never realized from going there.

Now... the Exxon thing, I don't know about the not paying any taxes thing, do you have any information to back that up?

(Note: I have only read this far, if explained in later posts, disregard, I have been very sick the last few days and online not at all. I may make a post as towards how fucked my weekend was).

[wufwugy]

Now... the Exxon thing, I don't know about the not paying any taxes thing, do you have any information to back that up?

ThinkProgress » ExxonMobil paid no federal income tax in 2009. (Updated)

It's not just Exxon. It's most megacorps getting away with very little taxation. I recall Google pays <3%

So this prompts the question... is social security something that should be eliminated, as it continues to cause those who pose less productive value to society to 'hang around'?

I like that you said "prompts the question". Most will say "begs the question", which actually has nothing to do with prompting a question, but is a circular logic idiom.

Anyways, on to the question. No, social security should not be eliminated. For starters, it's not a subsidy, it's something everybody who receives has paid into. It's our money. The only difference is that it's structured in a way that benefits a populace and economy much more than if it didn't exist.

On top of that, SS is one of the things about government that works extremely well. It has an enormous 2+ trillion surplus, and it's geared up to pay out full benefits without any changes till near the end of the century. But that hasn't stopped the sociopaths in charge of the politicians from doing everything they can to convince the people that it needs to be gut

From an economic perspective, cutting SS would be disastrous. It would help about 1% of the richest richies, but would figuratively chop off the arm of the rest of the people. One of the most important aspects of a healthy economy is the flow of finances and purchasing power of the poor and median people. This isn't theory, but actual data. Return on investment of things like food stamps is infinitely higher than things like cuts in estate tax. Infinite is the correct number too because many things, particularly tax cuts for the wealthy, are fully understood to have a negative economic multiplier effect. But that doesn't stop regular people from listening to Prophet Beck tell them the world would explode if megacorps aren't allowed to molest whomever they please


As to old people "hanging around", we're not even remotely close to answering that question. As sarbox would say, that's one of our civilization's golden calves that needs to be burned, yet we ain't doing it. Human rights are not a perfect thing. Give some in one place and it will detract in other places. Engendering an older and older population will cause unimaginable problems down the road, but not doing it will as well


BTW, I would like to point out that subsidies and welfare are not inherently bad. The words have been vilified. Not only does the data show that welfare for the unfortunate is extremely beneficial for the health and happiness of an economy, but that the mega wealthy receive hidden welfare several magnitudes greater than the plebians they point their fingers at. The next time you see somebody whine about some form of welfare, remember that Wall Street is subsidized by the Federal Reserve, and they get their money straight out of the pockets of the middle class.

[Monty3038]

ThinkProgress » ExxonMobil paid no federal income tax in 2009. (Updated)

I'm at work so this may have to be short, but I clicked through to the Forbes article this is picked from. On page two of the article it states that Exxon had a tax expense of 17.6 billion out of the 42 billion in profit. That is approximately 47% of their pre-tax earnings.

So, they owe 17.6 Billion in income tax for 2009. Let's then read the rest of the article, which states they also owe high income taxes to many of the countries they do business with, especially the oil producing countries. So they incur income taxes there as well... not just in the US.
-- From the article --
Exxon tries to limit the tax pain with the help of 20 wholly owned subsidiaries domiciled in the Bahamas, Bermuda and the Cayman Islands that (legally) shelter the cash flow from operations in the likes of Angola, Azerbaijan and Abu Dhabi.
--- End of Article quote ---
Which as I read it states that their income from some of the operations is legally sheltered in off shore accounts, not subject to taxation. This does not say that they pay no taxes, just that some of their income is sheltered.

--- From the article ---
Though Exxon's financial statement's don't show any net income tax liability owed to Uncle Sam, a company spokesman insists that once its final tax bill is figured, Exxon will owe a "substantial 2009 tax liability." How substantial? "That's not something we're required to disclose, nor do we."
--- End of Article Quote ---

Ok, so their financial statements don't show any net income tax liability... as mine doesn't either... that doesn't mean that I didn't PAY taxes to uncle sam, I get a fair share of what I paid in back, but not all of it. Exxon has to follow the proper filing procedures with the SEC and such as well... so unless I see better than a forbes article stating they aren't paying enough in taxes, I don't really know what they are paying in taxes.

And from what I've heard, though not researched, oil companies don't have as high of a profit margin as other industries, so taxing them futher only hurts the consumer, who it is passed along to.

I'll try to add more if work permits, got to check a server right now.

[Monty3038]

Ok, so I did some more looking, the server reboot worked

The US Corporate income tax works in a graduated percentage based upon profits of US Resident corporations. So, now on to the Exxon page...

Well, nothing I can find there on their financial statements, so I went to the SEC filings section of my brokerage account, where I find that for 2009, on their 10-K SEC statement, Exxon Mobil claims 19.2 billion dollars in profit before shareholder payments and taxes.

Searching further, I find the following in their statements:

"
Income, sales-based and all other taxes and duties totaled $78.6 billion in 2009, a decrease of $37.6 billion or 32 percent from 2008. Income tax expense, both current and deferred, was $15.1 billion, $21.4 billion lower than 2008, reflecting lower pre-tax income in 2009. A higher share of total income from the Upstream segment in 2009 increased the effective income tax rate to 47 percent compared to 46 percent in 2008. Sales-based and all other taxes and duties of $63.5 billion in 2009 decreased $16.2 billion from 2008, reflecting lower prices and foreign exchange effects. "

Which would seem to imply that they are paying a pretty large amount of income taxes. I am having difficulty interpreting all of the sections of their financial reports (I am no accountant, that is for sure)... but it appears they paid a pretty large amount of income taxes around the world...

[Monty3038]

Ok, one last thing about Oil companies... here is a statement on CNN.com about the oil companies and profits...

"The average net profit margin for the S&P Energy sector, according to figures from Thomson Baseline, is 9.7%. The average for the S&P 500 is 8.5%. So yes, energy companies are more profitable than many others...but not by an inordinate amount.
Google, for example, reported a net profit margin of 25% in its most recent quarter. Should we have an online advertising windfall profit tax? "

So... it appears that oil companies are not as well off as many think... even though they deal in really big numbers.

Now... the social security thing...

Yes, everyone who receives it has paid into it... and if they received back what they paid into it, I'd be good with that, even with a mild form of interest attached. For example, if I paid in $200 a week for 20 years, I would have 'banked' $208,000 dollars into the system. Now, I'm not an accountant so I might screw this math up royally, but let's say that we compound 4% interest on that to be generous, over the 20 years, I have now invested about $318,000 dollars INTO social security. Take away 5% (for round numbers) for administration, leaving me around $302,000.

So, now I start getting my social security check... how much should it be?

If I take out my $200 per week again, I should be able to withdraw for 20 years, right?

But does it work that way?

Nope... a lower income worker gets a higher percentage of their contributions back than a higher income worker does. Benefits are also based on Cost of living indexes and also are reduced if you work and earn more than your social security benefit.

So... I also found a chart that in 1960 5.1 workers supported the system and each beneficiary of the system, where in 2031 it is estimated that only 2.1 workers will be supporting that same beneficiary, which means their SS contribution will have to increase... or the beneficiary benefit has to decrease to keep the system solvent...

While it is a workable system, the fact that we have fewer paying into a system that has been reduced or ineffectively managed makes it a defective system. It will eventually fail in the current form.

So what would be so wrong with phasing it out and expecting people to pay for their own retirement?

[wufwugy]

So what would be so wrong with phasing it out and expecting people to pay for their own retirement?

First off, I'm on neither side. I want both. This is in regards to virtually all things economic. I want balances between social programs and private programs, a balance between socialism and capitalism. So I tend to not like the idea of, say, phasing out a good social program like SS when it, as well as related issues, can be improved.

The reason lower brackets receive more (or at least should) is because that's an important aspect of flourishing economies. An economy is made up of the people, the commons, the masses, the middle class. If the goal is to optimize an economy, there needs to be social programs that distribute purchasing power in such a way that the lower brackets receive some extra benefits paid for by higher brackets.

Philosophically, you can disagree with that, like many people do. But don't think it's good economic policy. The reasons are many, but they're also irrelevant. A society that pursues egalitarianism cannot do so without adequate progressive wealth distribution. There are many ways to achieve that, and our current SS system is quite valuable in that respect


Think of this: The economic problems that created the situation we have is widely regarded as a bit worse than that which caused the Great Depression. But if that's the case, why is the Great Recession not nearly as bad as the GD? There are a couple reasons, but the main answer is social safety nets. In the 20s and 30s, there was no unemployment insurance or social security. When the numbers of poor people increased due to job losses, those people lost virtually everything, and the economy spiraled into a Hooverville where even the wealthy were hurting hard.

We don't have that nearly as badly today because we learned the importance of maintaining some semblance of balance in wealth distribution. We have a long, long way to go before we achieve a truly fair sense of egalitarianism and economic greatness, but the little bit of "take some money from those who can spar it and give to those who have too little" has paid for itself countless times over.

Because people are a product of economies, they need to be accounted for. When a segment of those people are depressed or under utilized or whatever it has a negative drag on virtually the entire system. That's why the simplistic "why should one person do more or less than another person" just doesn't cut it