Quote :

"Easley urges Bush to investigate gas companies' profits RALEIGH, N.C. — North Carolina's governor has asked President Bush to formally investigate gas companies' record profits in 2005. In a letter sent Tuesday, Gov. Mike Easley also asked Bush to authorize Attorney General Alberto Gonzales to investigate gas companies and their record profits. "This is a problem that transcends state boundaries and requires action by the federal government," Easley wrote. "I am writing to urge you to take decisive action to investigate the sources of these record-breaking profits, punish any wrongdoing that may underlie them, and most important, take immediate steps to reverse this situation and lower the amount consumers pay to the oil companies." Easley specifically mentioned Exxon Mobil's announcement this week that its 2005 profit was $36 billion, the largest profit any company has earned in the history of the United States. Easley said an investigation should require oil industry executives to testify under oath, unlike in November, when they testified before Congress, but not under oath. "New hearings will be held by the Senate Judiciary Committee tomorrow (Wednesday), but oil company executives have declined even to appear," Easley wrote. "That situation should not be allowed to continue." Easley is not the only North Carolina politician talking about the price of energy. On Wednesday, the chairman of the Republican National Committee, Ken Mehlman, and state GOP leaders will discuss the state's gas tax. A 2.8-cent-per-gallon increase in the gasoline tax took effect Jan. 1 in North Carolina. In addition, House and Senate members have asked Easley to hold a special session to consider reducing the gas tax and other fuel taxes."

This from today's Wall Street Journal...

Quote :

"Politicians and many of our friends in the press imply that Big Oil is somehow responsible for higher prices because of "gouging" or somehow conspiring to withhold supply. Never mind that every time the Federal Trade Commission looks into these claims, it finds no evidence to support them. Energy prices fluctuate over time--oil was under $20 a barrel for most of the 1990s--and if oil executives could pull a string and create $65-a-barrel oil and $3-a-gallon gas, that's all we'd ever see. Today's high energy prices reflect strong demand from almost every major oil-consuming nation, including India and China. They also reflect political uncertainty in some major oil-producing countries, notably Iraq, Iran and Nigeria. But the worst way to respond to such uncertainty is by robbing the profits that the companies need to diversify global oil supplies. Unfortunately, that's exactly what the politicians are up to. A backdoor windfall profits levy, which would raise taxes on oil companies by changing the way inventory is valued, has already passed the Senate. This is especially insidious because it is an after-the-fact raid on profits already earned by the company under current law. If Congress can suddenly pass a law confiscating the past profits of companies on a whim, we aren't all that far from Russian President Putin and Yukos. The Senate has also passed another punitive measure that would repeal the foreign income tax credit that all American companies receive for taxes paid overseas. This means they will be double-taxed, never mind that they made their investments and earned that profit under the expectation of getting the tax credit. These large oil concerns are already subject to a 35% corporate income tax rate, and record profits mean commensurate tax payments to the federal Treasury. According to a new report from the Washington-based Tax Foundation, Exxon, ConocoPhillips and Chevron paid a combined $44.3 billion in corporate income taxes in 2005, or 49.2% more than the $29.7 billion they paid the previous year. Furthermore, says the report, "the average effective tax rate on the major integrated oil and gas industry is estimated to equal 38.3%. This exceeds the estimated average effective tax rate of 32.3% for the market as a whole." In other words, even without Congress' would-be ex post facto confiscation of profits, energy companies are already providing the Members with a "windfall" to use to finance their 14,000 spending earmarks."

With January's gas-tax increase, North Carolina moved up to the sixth most expensive gas-taxed state in the nation. The governor should check his tax-mirror and see if there aren't some ways he can lower gas prices here at home.

2/1/2006 11:19:48 AM

the 3 cents a gallon tax isnt why anyone is complaining about gas prices

2/1/2006 11:38:19 AM

^
The 3 cent/gal increase is adding to an already high gas-tax. We have the highest in our region....

North Carolina: 29 cents per gallon

Tennessee: 20 cents
Alabama: 18 cents
Virginia: 17.5 cents
Georgia: 7.5 cents
Florida: 14.3 cents
South Carolina: 16 cents

Those are just the state taxes. The feds add on another 18.4 cents in every state. In North Carolina, we pay 45 cents in taxes for every gallon of gas we buy. South Carolina, drivers pay 10.6 cents per gallon less.

[Edited on February 1, 2006 at 11:50 AM. Reason : .]

2/1/2006 11:46:40 AM

grapehead: easley should put his money where his mouth is and cut our fucking gas taxes.

2/1/2006 11:50:18 AM

he flat out wouldn't do that when gas was $3.50 a gallon. "it would hurt the state too much"

i'm sure he'll do it now when it's $2.27

2/1/2006 11:52:39 AM

if there's any tax in the world I'm 100% behind, it's gas tax and taxes on other environmentally dangerous businesses

I'm not 100% behind any tax, but if I was, that would be it

2/1/2006 11:59:07 AM

'course, I'd much rather see the corporations taxed (and not given free handouts) than the citizens taxed

[Edited on February 1, 2006 at 12:00 PM. Reason : .]

2/1/2006 11:59:42 AM

more like "STOP BUILDING/MAINTAINING/IMPROVING ROADS"

right?

2/1/2006 11:59:46 AM

virginia has roads that are about a million percent better maintained and they pay 11 cents a gallon less than us

that's made up elsewhere i know

[Edited on February 1, 2006 at 12:02 PM. Reason : *]

2/1/2006 12:02:00 PM

my point was that this is an obvious ploy from easley to place the blame on exxon and the "evil corporations" before an investigative reporter or whistleblower can make public all the waste and mismanagement by the DOT that contributes to our higher than average gas tax.

2/1/2006 12:11:01 PM

^That's about right.

When I first heard this news I was floored that Gov. Easley was actually going to do something that might help the citizens of N.C. He has been king of State first citizens second here lately.

Then I rememberd that all the government is going to do has already been done several months ago. Bring the oil tycoons in to have a chat, don't swear them in, ruffle a few feathers in front of them so they have some soundbites for the next election. I guess this is Easley's soundbite. The latest do nothing about it round of hot air to avoid taking the fall for their party come next election.

I wonder how many millions in profit the state made if you consider the taxes they collected for roads via the gas tax minus the amount of money actually spent on roads.

2/1/2006 12:28:09 PM

I'm sure the gigantic hike in gas prices and the fact that the gas company just made more money than any american company ever has are totally just coincidences.

2/1/2006 12:46:40 PM

Quote :

"I'm sure the gigantic hike in gas prices and the fact that the gas company just made more money than any american company ever has are totally just coincidences."

2/1/2006 1:33:44 PM

Who said they were?

From an economics standpoint, if Easley reduced gas taxes in North Carolina, then carolina citizens would pay less for gasoline and the rest of the country would pay slightly more.

2/1/2006 1:56:00 PM

^Not sure how carolina citizens paying less for gas because of a reduced gas tax would change the price of gas for the rest of the country one way or the other.

2/1/2006 2:23:12 PM

Sounds like Easly should be the last person to call out Exxon on gas prices.

However, I do think these massive profits need to be investigated. If I had to pay extra on gas, I'd have that extra go towards NC schools rather than oil exec pockets.

2/1/2006 2:35:47 PM

^^ that's why you should leave and go take econ101

2/1/2006 3:44:21 PM

But the important thing is what margin of profit do the oil companies make.
I believe I remember hearing ~10%.

Oil is a extremely large industry. 10 billion for a company that operates in the trillions is not "strange"

MSN says 10.7% margin. http://articles.moneycentral.msn.com/Investing/CNBC/Dispatch/060128markets.aspx
Easley is an idiot

[Edited on February 1, 2006 at 7:43 PM. Reason : -]

2/1/2006 7:42:11 PM

NO WAIT

WHAT THE FUCK DOES THE NORTH CAROLINA TAX RATE HAVE TO DO WITH THE COST OF GAS IN OTHER STATES

I FEEL LIKE I'M TAKING CRAZY PILLS

2/1/2006 7:45:55 PM

If the problem is an increased demand driving up the cost of crude, why don't the profits reflect this? The profit margin would be the same, the revenue would just be higher.

IOW...

Quote :

"I'm sure the gigantic hike in gas prices and the fact that the gas company just made more money than any american company ever has are totally just coincidences."

2/1/2006 7:46:25 PM

do you know what a profit margin is, gamecat?

2/1/2006 8:26:21 PM

^^ If I sell 1 million gallons at $2 a gallon, I earn $2 million, take 10% as my margin and take home $200k. Now, gas goes to $4 a gallon, I earn $4 million, take 10% as my margin and take home 400k. Profits have doubled, but my margin has not changed.

Secondly, The United States is the worlds third largest producer of crude oil and a lot of those oil wells are owned by you know who (Exxon, Mobil, BP, etc). So, when the price of crude oil goes up the extraction division of these companies become rediculously profitable. A welcome change because this part of the oil industry operated at a loss for most of the 90s.

2/1/2006 10:02:57 PM

I actually like Easley's letter

not because I agree with it

but because I work in energy management now and it helps with the "ya never know what our
stupid ass govt is gonna do" pitch to companies.



[Edited on February 1, 2006 at 11:53 PM. Reason : ]

2/1/2006 11:44:17 PM

I love the idea of reducing gas prices.

I think gas prices should be like $1 a gallon.


I mean sure waiting in line for 17 hours to get gas would be inconvenient, but so what...

Think about it $1 A GALLON!!!!!!!!!!


People who complain about prices are fucking gay. No one is forcing you to buy gas.

[Edited on February 1, 2006 at 11:49 PM. Reason : a]

2/1/2006 11:48:46 PM

aha jbtilley strikes again!

My favorite jbtilley quote:

Quote :

"During the summer I got the sense that the oil companies were raising the prices a nickel a week to see how much they could get away with. I imagined them snickering and saying "I can't believe we can charge that!" with every raise. That was before the hurricanes (the biggest excuse yet) hit. Then all bets were off. I guess they could have done it in 2K, 2K1, 2K2, etc. Maybe they tried and maybe people wern't as willing to pay. Maybe they didn't try but if you are going to try you have to start some year and it just happened to be this year. "

what a moron.

Quote :

"When I first heard this news I was floored that Gov. Easley was actually going to do something that might help the citizens of N.C."

Looks like Easley's stupid political ploy is working...

[Edited on February 2, 2006 at 12:45 AM. Reason : 2]

2/2/2006 12:44:03 AM

Quote :

"'course, I'd much rather see the corporations taxed (and not given free handouts) than the citizens taxed"

CORPORATIONS ARE TAXED!! THEY PASS THEIR TAXES ON TO THEIR CONSUMERS IN THE FORM OF HIGHER PRICES!! WHY DONOT THE SOCIALISTS UNDERSTAND THIS?

Christ, I hate Easley. I cannot understand why anyone voted for him. He raised the fucking gas taxes, and the roads are just as shitty as ever. WHERE THE FUCK IS ALL THAT MONEY GOING?!! I think his paycheck needs to be suspended until we see results. That said, North Carolina sucks ass.

2/2/2006 12:56:02 AM

^^Yeah, I pretty much still stand by that. I guess you think that prices are at record levels because of "the situation" with Iran, Sharon's stroke, butterflies dissapearing in the Amazon, record cold weather for this time of year, record warm weather this time of year, etc., etc.

I still have yet to hear from anyone that has taken econ101. How does lowering the gas tax in NC by $0.03/g raise the price of gas for the rest of the nation? Does it have something to do with the huge spike in demand on gas in NC lowering the supply for the rest of the nation? I haven't taken econ101, so enlighten me.

Quote :

"Looks like Easley's stupid political ploy is working..."

He did get reelected on a prior record of shafting carolinians.

2/2/2006 7:47:24 AM

hmmm...
Easley in '08, this is only the begining

[Edited on February 2, 2006 at 8:44 AM. Reason : /]

2/2/2006 8:43:53 AM

Quote :

"I still have yet to hear from anyone that has taken econ101...Does it have something to do with the huge spike in demand on gas in NC lowering the supply for the rest of the nation? I haven't taken econ101, so enlighten me."

There you go, wasn't that hard. But from what I was reading in this thread, it isn't 3 cents to make our tax equal to our neighbors, it would be 12+ cents. And no one said it would be a "huge" spike. It would not even be noticeable for months, but it would happen.

2/2/2006 10:10:16 AM

Great stuff from Ben Stein....

Quote :

""The amount of profit on each gallon of gasoline is between six and eight cents. If you cut out all the profit so that Exxon/Mobil went out of business, and Conoco went out of business next year, you'd only save a few cents per gallon. "It's just nonsense that they're bleeding America white. They don't set the price - the price is set on world markets. It's good if they make a profit becuase then they can have more money to explore for more oil and more energy sources. Cavuto said that the special interest groups are saying oil companies "should give some of it back; what do you say?" "Absolutely not!" Stein insisted. "It's already been given back ... they're paying something like 40 percent of their profits in taxes ... the next biggest chunk [of profits] goes back in dividends and the rest of it goes for exploring more oil." Cavuto said that Bill O'Reilly and others say the oil companies are gouging. Stein said there is no evidence of that. "There has not been a successful price-fixing case against an oil company in a hundred years. It's just total nonsense." Stein added that the price is set on the "world market by young traders who drive Ferraris. Exxon, Conoco Philips, Chevron ... they are not fixing the price. That's just total nonsense." "

2/2/2006 10:21:15 AM

^^I thought people were talking about repealing the $0.03/g tax increase, not reducing it to equal that of other states. If it wouldn't be a huge spike or even noticeable then how would it affect national supply?



[Edited on February 2, 2006 at 10:23 AM. Reason : -]

2/2/2006 10:22:06 AM

Quote :

"virginia has roads that are about a million percent better maintained and they pay 11 cents a gallon less than us"

Are you sure about this? Virginia also has turnpikes and toll roads which generate a lot of money. And I still don't think Virginia has better roads.

As far as paying 11 cents more, that wasn't the case when I lived in NC. I've been out of NC for two years and gas prices has obviously changed since then, so I wouldn't know about the price.

2/2/2006 10:33:14 AM

Quote :

"Easley defended his letter through a spokeswoman: "One company has already reported $36 billion in profits in the past year. Compare that to the 2.8 cent gas tax and let me know where the problem is." "

The problem, Mr. Gov, is that your statement there is pretty misleading...taking advantage of all of the poor folks who had the unfortunate luck to be educated in one of your gov't schools.

He is comparing Exxons total profit for the year with just the increase in his gas tax. It would be a more accurate comparison to say something like
"The big oil companies make about 6-8 cents profit per gallon while North Carolina makes 29 cents per gallon. Now who is gouging the public?"

[Edited on February 2, 2006 at 10:36 AM. Reason : .]

2/2/2006 10:35:32 AM

Quote :

""The big oil companies make about 6-8 cents profit per gallon while North Carolina makes 29 cents per gallon. Now who is gouging the public?""

If true you could always just argue that at least the 29 cents is going back to the public in the form of roads ( ) and other services wheras the 6-8 cents profit the oil companies make goes toward lining a handfull of people's pockets.

That said raising the price is still raising the price.

[Edited on February 2, 2006 at 10:56 AM. Reason : -]

2/2/2006 10:44:15 AM

^ well that is not actually true. those profits go to a lot of rather useful areas. they don't just sit in the bank. for example: 1. making up for years where we lost money 2. looking for more oil (those little platforms cost 100's of millions to build and 100's of millions more to operate 3. returns to investors 4. improving and replacing 100 year old equipment (i.e. at refineries) so that they will continue to be useful 5. building units that produce lower emissions fuels (that cost us 100's of millions to build and give negative roi) 6. research into alternative energy sources 7. all the $ we give to charities (of course that is pr and we get a tax break but still... lots of charities would not exist if not for exxon, shell, bp, etc) 8. money to employees (not just your execs... all the little people get some of that too so it goes right back into the economy really)

2/2/2006 11:34:44 AM

Quote :

"CORPORATIONS ARE TAXED!! THEY PASS THEIR TAXES ON TO THEIR CONSUMERS IN THE FORM OF HIGHER PRICES!! WHY DONOT THE SOCIALISTS UNDERSTAND THIS?"

HAHAHAH SOCIALIST? right. As for corporations being taxed, I know they ARE taxed, but they should be taxed MORE rather than given handouts by the government.

i have to make sure you don't think i'm a socialist, so that you don't sick your buddy pinochet on me

[Edited on February 2, 2006 at 11:40 AM. Reason : .]

2/2/2006 11:39:36 AM

corporations are taxed more here than even in all those wonderful environment loving welfare states

2/2/2006 11:44:46 AM

but they're also given tons of handouts, and even if that's true, I bet that if you subtracted the handouts and 'assistance,' and the laws that let them scoot around tax laws, they pay way less in taxes than those countries

also, i'm not all about welfare states

2/2/2006 11:46:45 AM

Queti: I thought that the claimed 6-8 cents per gallon profit was what they were left with after considering all the expenses you mentioned.

2/2/2006 11:49:35 AM

Quote :

"HAHAHAH SOCIALIST? right. As for corporations being taxed, I know they ARE taxed, but they should be taxed MORE rather than given handouts by the government."

So you want the us, WeThePeople, to pay even MORE for products/services then? Because that's what would happen as the corporations would raise their prices to reflect the rise in taxes. I agree that corporate subsidies should end though. They are anti-capitalist and pro-socialist.

Quote :

"i have to make sure you don't think i'm a socialist, so that you don't sick your buddy pinochet on me"

Yeah that would be unfortunate wouldn't it? You would have to go a long way to convince me of that.

2/2/2006 11:52:10 AM

^^no, the things she mentioned are what profits are invested in

when a corporation makes profit it can only do two things

1. pay out dividends to shareholders
2. retain the earnings to invest the company's growth - which is what all that stuff falls under

[Edited on February 2, 2006 at 11:53 AM. Reason : ]

2/2/2006 11:53:06 AM

I don't know if you guys know this

but the other day Americans became addicted to oil.

2/2/2006 11:55:40 AM

well, proto my boy, if you'd read my whole initial statement, you'd see that I said

Quote :

"if there's any tax in the world I'm 100% behind, it's gas tax and taxes on other environmentally dangerous businesses I'm not 100% behind any tax, but if I was, that would be it"

I would rather that we pay more for products and less in taxes however, yes, if that's the choice. At least then, taxes are based on consumption and not just on how much money you make. It's much more fair that way and would reduce consumption at the same time.

2/2/2006 12:02:47 PM

Easley is trying to get his name out there on a National level.... basically testing the waters for the slim chance of a possible '08 presidential run.

Not that I agree with most of his politics, but he is a popular GOVERNOR from a SOUTHERN state and I would think he has as good a shot as any other.

(I may be wrong, but I think this is the 2nd time in as many months he's called Bush out on something like this. ---- and not to say he isn't legit in his concern either.)

What do ya think?

[Edited on February 2, 2006 at 12:24 PM. Reason : .]

2/2/2006 12:23:12 PM

Quote :

"but they're also given tons of handouts, and even if that's true, I bet that if you subtracted the handouts and 'assistance,' and the laws that let them scoot around tax laws, they pay way less in taxes than those countries"

True, but most of those handouts were in the form of targetted tax-reductions, potentially bringing our tax rate more in line with Europe's corporate tax rate. Secondly, are you daft!?!? In socialist Europe, many "key" industries are more than exempt from corporate taxation, they are directly subsidized with cash-monies (Airbus, various steel conglomerates, BMW, etc) in an effort to increase "export earnings", etc. We also do it for Amtrak and the TVA, but these were not the corporations people usually refer too.

[Edited on February 2, 2006 at 12:29 PM. Reason : Amtrak! ]

2/2/2006 12:28:09 PM

Quote :

"Queti: I thought that the claimed 6-8 cents per gallon profit was what they were left with after considering all the expenses you mentioned."

Quote :

"^^no, the things she mentioned are what profits are invested in when a corporation makes profit it can only do two things 1. pay out dividends to shareholders 2. retain the earnings to invest the company's growth - which is what all that stuff falls under"

BTW: here are ours
http://www.forbes.com/feeds/ap/2006/02/02/ap2495065.html

[Edited on February 2, 2006 at 5:09 PM. Reason : er]

2/2/2006 5:07:13 PM