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[bigshow345]

I think even though its never going to happen that all the transportation companies world wide need to get together and take it to the oil execs and sue them for lost revenue due to fuel prices. Now I do not drive a big rig but still fuel prices suck ass

 

[greg334]

Well guys when you look at large corporations, they do have higher profit margins. Pfizer's 33% profit margin was discussed as excessive and I think it was, even at 17% it still is.

The same goes for the auto companies, but there is a slightly different way they do their numbers because 1) they use a franchise system as an outlet for their products, not a real retail system and it is controlled carefully and 2) they have cyclical payments for things like retiree and worker benefits that they include to show a loss. I remember that GM used to have something like a 12% profit margin for a long time - right now it is -23% but it is negative because of the debts they are paying out instead balancing everything out and they are still making a lot of profit.

When you compare a grocery store or other retail outlets to suppliers or distributors, then the numbers look unconceivable. I don't remember the numbers, but I remember someone looking at Farmer Jacks distribution system and they had something like a 18% or 20% profit margin while the stores themselves were less than 3% because each was counted differently.

 

[Packmule]

Greg,
Consider the fact that Companies like EXXON OIL CORP. is a multi tier Company, and each level is operating at different margins with only a small percent of these profits coming back to the Corporation.
When all profits are combined and the TRUE P&L (after payments of shares to Stock holders and investors) is 9% profit, that is HUGE!!
Remember they are working very hard to keep that number as low as possible to fly under the radar to Government eyes and ears. while at the same time creating a lucrative draw for big investors who are also playing the "Hide the monies game".
The Feds are not stupid, they know what kind of real profits are being made before the use of the Corp. loop holes are used. They know most of them because they created them!

Bottom line is ....The Rich get Richer and the POOR drive Trucks!!!

 

[OntarioVanMan]

Hey!! I am not poor...just my assets have been on a downturn lately!!!
or....My incoming assets haven't been keeping pace with my out going liabilties??? *gulp*

 

[greg334]

Greg,
Consider the fact that Companies like EXXON OIL CORP. is a multi tier Company, and each level is operating at different margins with only a small percent of these profits coming back to the Corporation.
When all profits are combined and the TRUE P&L (after payments of shares to Stock holders and investors) is 9% profit, that is HUGE!!
Remember they are working very hard to keep that number as low as possible to fly under the radar to Government eyes and ears. while at the same time creating a lucrative draw for big investors who are also playing the "Hide the monies game".
The Feds are not stupid, they know what kind of real profits are being made before the use of the Corp. loop holes are used. They know most of them because they created them!

Exxon has a pre-tax or gross profit margin of 22%, their after tax profit margin is 9.8%. Yes they are huge, with an industry profit of $128 billion dollars, the profits margins overall in the industry is push almost two digits, so this is the corporation’s profits as posted, not one that was just reported in an article.

The thing I find really funny is that the profit they make is also tied to the strength of the dollar and in a commodities market that is traded in dollars, so with a falling value of the dollar, it appears to look like they are making more money than they did in the past but as these execs pointed out in the committee meeting, if you adjust the money pre-1968 amounts, they are not making all that more then they did in the 60’s.

As for keeping things low, they can’t hide too much. If you want to close the loop holes even more, then we will all suffer because the laws apply across the board. The government is the problem, we suffer because corporations don’t pay taxes, we do. The contention that the house committee has is that the oil companies are the single cause of the problem and their solution is that the oil companies can just reduce their profits and pass that on to the consumer, but in fact the need it to reduce the tax on the fuel and oil. You do know that they tax every step of oil production here in this country and this is another reason that they import oil? The feds are stupid, they don’t realize that the lowering of interest rates, the need to artificially prop up the stock market and the proposed steps toward nationalization of the banking system effects the value of the dollar, which has a deep effect on what we pay at the pump.

In truth the best thing to really do is to replace the tax system, Fair Tax

 

[Packmule]

"Exxon has a pre-tax or gross profit margin of 22%, their after tax profit margin is 9.8%. Yes they are huge, with an industry profit of $128 billion dollars,"

Your numbers are correct.

"As for keeping things low, they can’t hide too much."

Come on Greg, Let's be real!!!!!

"If you want to close the loop holes even more, then we will all suffer because the laws apply across the board."

This is true, but how many smaller companies are at the level where they can really take advantage of some of the loop holes
available to Major industries?

"we suffer because corporations don’t pay taxes, we do."

EXACTLY!!!

"You do know that they tax every step of oil production here in this country and this is another reason that they import oil?"

Yes, and that's before it gets to the STATE level!!

"The feds are stupid, they don’t realize that the lowering of interest rates, the need to artificially prop up the stock market and the proposed steps toward nationalization of the banking system effects the value of the dollar, which has a deep effect on what we pay at the pump."

Yes I tend to agree with you Greg, but there is a lot of economist (not Party related) that will disagree this theory. There is a fine line of right or wrong when trying to avoid or survive a recession.


"In truth the best thing to really do is to replace the tax system, Fair Tax"

AMEN to that!!!!!!!!!!!!!!!!!!

 

[greg334]

Danny
I contend that hiding things is different than taking advantage of our system, for example former president Clinton has an off shore company, he is not hiding anything but removing his taxable income so not to pay taxes. Oil companies, like Pharma companies shelter money in order to save it from the tax system we have, so I don't consider this hiding as much as I consider it avoidance and the government is to blame for it.

As for the economist, I talked to one at U of M today while I was there visiting and he said something to the effect 'it really is impossible to come to a reasonable and logical agreement on what actually is going on because this economy is not acting like it did in the past.... and applying the theories are not working.... the real problem is that we really don't know what to make of it... so you will have different opinions but not one of them is the correct one.' I have heard this before, many times and it shows me that many can't figure it out, if someone could their wealth would surpass buffet and gates by 10. By the way the other thing he added is regardless what the numbers say, we are in a recession and have been for a few months - look around.

 

[RLENT]

Oil companies, like Pharma companies shelter money in order to save it from the tax system we have, so I don't consider this hiding as much as I consider it avoidance and the government is to blame for it.

Yes, that's right - it is merely the way the game is played. BY EVERYONE.

There is absolutely nothing wrong whatsoever with taking every advantage you can of the tax system as it exists - in order to pay the least amount of taxes possible. That is the American way and I'd ask anyone who says otherwise to show me the deductions they were entitled to, but didn't take that they could have, on their last tax return.

Lessee .... all those in favor of eliminating the home mortgage deduction ..... please raise your hands .....

 

[Packmule]

Greg,
Yes I phrased that wrong by saying "Hiding things", it would have been more politically correct to have said "Using the system to their advantage".

I'm still spinning over the 9.8% profit margins!! I could retire nicely on a small portion of that!

 

[greg334]

Greg,
Yes I phrased that wrong by saying "Hiding things", it would have been more politically correct to have said "Using the system to their advantage".

I'm still spinning over the 9.8% profit margins!! I could retire nicely on a small portion of that!

Danny,
Seeing how these guys work at the pharma company from the inside, hiding is a lot different from sheltering. Hiding to me is messing up on a drug study and then not including the results in the application to the FDA or having the FDA exclude the results as part of the fast tracking of the system (yes they do help hide things).

Tax shelters are quite a different thing as they are created out of our horrible tax system and do absolutely nothing for the country by having the money off shore - some what like jobs. Fair Tax is one solution

The high percentage is listed on several websites, the pharma industry I think is one of the highest, next to the defense industry. Food and other industries have lower ones, as mentioned groceries retail outlets, but gas stations (at least the ones I get to see their books are around 8% to 9% when you take in account the markup of the other items in the store and I assume truck stops maybe higher.

 

[Tennesseahawk]

A talk show guy was saying yesterday that Exxon/Mobil pays more taxes than the whole bottom half of income tax payers in the US. That made me think... DUH! If they're paying THAT much in taxes, they're making THAT much off gas! He tried to make it like it's government's fault. Fact is, it's BOTH of them screwing the normal Joe! I hear one say "You pay more for a gallon of bottled water." Well... I don't put 20 gallons of water in my van, or 150 gallons of coffee in my truck. Fuel is a staple this country needs to survive. Yes, even more than bottled water or coffee.

And to all those numbskulls who account the 60's price as compared with today's for inflation... Tell me your pay has gone up like that, and I'll call you a liar. No one's paycheck is adjusted for inflation that tightly... except maybe lawyers and execs... and politicians. Fact is, we in the truck driving community have less, without even counting for inflation, than we did in the 80s; while the freight we haul usually hangs at less than the rise in inflation (produce, electronics, etc).

Is fuel the only thing that's allowed to adjust for inflation? Is oil justified to go WAY up on speculation because of some small hiccup in the system? Are oil companies justified in adjusting for inflation, when the rest of us aren't, just to satisfy their stockholders? And is the government, at ALL levels, justified in raising this taxes and that taxes on fuel, and mask it in the already inflated price?

I'll tell you what has gone up faster than inflation... government spending and the debt we leave to the next generation.

And don't even get me started on the ENVIRONMENTALISTS...

 

[greg334]

And to all those numbskulls who account the 60's price as compared with today's for inflation.

The comparison is made to show what happened to the dollar after the Nixon administration messed with it. There is a long line of price controls, fed reform and other things that took the dollar and messed it up. Before 1968, the date that is usually used, the dollar was pretty much stable and not subject to devaluation by either the fed or the administration.

Fact is, we in the truck driving community have less, without even counting for inflation, than we did in the 80s; while the freight we haul usually hangs at less than the rise in inflation (produce, electronics, etc).

We were also highly regulated, much of what we have today comes from that deregulation. So I say let's go back to the 1980's regulations if it worked then.

Oil is bought and sold on the world market, the only real way to solve the price is to open up exploration and drilling which is stopped by government, not the oil companies. If Bush can sign an executive order to side step the environmental laws for the border, he can very well do it for oil. The absolutely best thing for us, the people is to get government out of the way.

 

[Tennesseahawk]

Greg... I was thinking the exact same thing about sidestepping environmentalist litigation for nuclear power plants, refineries, and drilling. Get rid of litigation and you have progress.

I'm going to post something I got from OOIDA about regulation. It made me rethink going back to it...

Prior to deregulation during the 1980’s, the Interstate Commerce Commission (ICC), was the agency responsible for administrating the minimonopolies that existed in the transportation sector of our economy. New grants of operating authority were seldom issued. Common carriers were permitted to haul only specific commodities between specific cities and could only charge rates on tariff schedules filed with the ICC. Contract carrier authority was slightly more flexible in commodities and routes, however, it was limited to only a few contracts.

Applying for new operating authority or expanding existing authorities was a very complex and expensive process that usually ended in failure. Notice would be published by the ICC of all authority applications filed at which time any existing carrier having authority to run in that area or haul the type of product applied for could protest the granting of the authority. Since, for the most part, all that had to be shown was that an existing carrier was capable of serving that customer and the burden of proof was on the new applicant to show they couldn’t, new or expanded authority was seldom ever granted. About the only way to get into the business was to buy someone else’s authority which as you can imagine was very expensive for even very limited pieces of authority.

With the virtual lock on freight shippers given to already established carriers, options for ambitious small business truckers were extremely limited. They could choose to haul exempt commodities. I.e. produce, livestock, materials in their natural unprocessed state or they could lease to existing ICC carriers. Hauling exempt often meant seasonal work with widely fluctuating rates and few opportunities for growing and establishing a viable trucking business since the leasing carrier controlled the relationship with the shipper and made all the decisions for the company.

With deregulation, the regulatory controls that allowed these minimonopolies were eliminated. Those minimal regulatory controls retained by the federal government were transferred to the U.S. Department of Transportation when the ICC was established in 1955.

Now to obtain operating authority all an ambitious trucker needs to show is that they are fit, willing and able to provide transportation services - and that they have minimum level of liability insurance to protect the public. Truckers applying for common carrier authority are also required to have cargo insurance in place.