Exxon-Mobil is a huge, multinational corporation. They do business all across the globe, and they pay taxes. Lots of taxes. However, the meme is that they don't pay income taxes in the United States. Okay, we'll go with that one too. Lets say for a minute that their evil accountants and tax lawyers have figured out a way to game the entire system and they pay no income taxes on a billion dollars a week. What would be a fair tax rate on $52 billion profit? Half of it? Fine. Lets say, simply for the sake of argument that XOM writes a check to the US government for $26 billion dollars. How will that help?
President Obama submitted his 2010 budget at about 3.7 trillion. Of that, 1.6 trillion is deficit spending. That's money we've got to borrow. Money we don't have. XOM's 26 billion is not even a drop in the bucket. Less than 2% of the deficit. We'd still need to borrow 1.5 trillion this year to pay for the things that our President thinks the United States needs. Hell, the tax bill for XOM wouldn't pay for one program in the Department of Education. The ESEA budget is 26.8 billion. That's just one program in one department.
No, gentle reader, revenue isn't the problem, it's spending. Next week the Republicans in the House are going to introduce Cut, Cap, and Balance legislation that will cut Federal spending, cap it at a percentage of GDP, and offer a balanced budget Amendment to the US Constitution. I support this legislation and think that it's a good first step for getting our spending under control.
Of course, our President doesn't think we need a balanced budget amendment. Of course he doesn't.
President Obama, who would have no role in the amendment process, opposes the idea.Of course he does. It would require him to make tough choices regarding spending, priortizing our expenditures to match our revenue. It's no wonder the man doesn't like the idea, which is why it's now a perfect time to float it. Let our President explain why he doesn't want to control spending.
And, I'm not convinced that Grandpa in the nursing home is something that our Government should be concerned about. That's a family concern, and a state concern, but the Federal Government should be unconcerned about it.
Exxon-Mobil is only one of thousands of big and small oil & natural gas producers in the USA who enjoy the benefits of a 15% off-the-top depletion allowance. It had, maybe, its place back when oil was $2 a barrel. Oil now runs around $100 a barrel or ~50X more now than when the depletion allowance started. Frankly, it's still in place only because of the millions of dollars donated to Republican candidates by Exxon-Mobil, Chevron, etc., etc.
ReplyDeleteWell, J. Congress could have changed that when they had majorities in both houses of Congress. They could have also passed a budget, but they couldn't seem to get that done either.
ReplyDeleteThere's enough blame to go around in the budget crisis we find ourselves in, but the main culprits are Pelosi, et al, who couldn't seem to take care of business. Now the adults in the House are taking the arguments to the people.
Cut, cap and balance DOES make sense... And since we're looking at amendments, how about term limits?
ReplyDeleteJ it is easy to demonize big business, but if you make it harder for them to do business in the U.S. they will just leave and do business elsewhere. Government spending is out of control and we need more jobs not less.
ReplyDeleteAnd why is oil so high??? Perhaps we should produce our own oil in the U.S. Then we could control the price and sell some of our excess to the rest of the world, it has worked out very well for Dubai.
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