Oil profits

From The Tax Foundation: 

Yesterday, members of the House Select Committee on Energy Independence and Global Warming spent the day beating up on oil industry executives for “excessive” profits and gouging consumers at the gas pump. Lost in the political theater is the fact that those “excessive” profits are net profits: that is, profits earned after taxes are paid to government. And while the oil companies have enjoyed a few good years, history shows that government has profited more from the domestic oil industry than has its shareholders.

Recent data from the Energy Information Administration shows that since 1981—the first year of the Windfall Profits Tax—total taxes from all oil industry sources exceeded the combined profits of all companies in every year but the past three. Between 1981 and 2006, government collected $1.65 trillion in total taxes after adjusting for inflation. That is 65 percent more than the combined earnings of the 16 largest domestic oil companies during the same period.

As the chart below shows, during most of that 25 year period, government tax collections were nearly twice industry profits in any given year. Indeed, in 2002, before the recent price spikes, the industry earned a collective $20.5 billion in profits. However, government collected more than $50 billion in combined income, property, severance, and excise taxes in the same year.

So, the lesson to members of the House committee is be careful of throwing stones when you live in a glass house.

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