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Friday, July 08, 2022

Working Minds Essay #119: REASON-BASED TAXATION and OIL CORPORATION TAXES

The price of gasoline at the pump is not caused by the President, but by the greedy unregulated oil corporations.

One of the basic elements of the Reason-Based Taxation solution is that corporations are entitled to a ten percent profit on pre-tax revenue; many corporations struggle to make even a 5% or 3% profit. R.B.T. specifies that any profits above 10% are taxed at 50 percent, no loopholes. (The details here are one reason that the text of the R.B.T. document runs four pages.)

• British energy giant Shell reported a record quarterly profit of $9.13 billion for the quarter ending 31 March 2022 – nearly triple the $3.2 billion reported in the same quarter last year and beating out its previous record from 2008; the massive profit comes despite the company having to write down $3.9 billion for its decision to exit operations in Russia following the invasion of Ukraine. — google search
• Shell revenue for the quarter ending 31 March 2022 was $83.164 billion, a 40.68% increase year-over-year. — Macrotrends LLC

The math is very clear (but you can skip to the result if you want to.)
Divide the $13.03B profit by the $83.164B revenue and it comes out as 15.667% profit!
Thus 5.667% excess profit times the $83.164B revenue comes out as $4,712,903.80.
Multiply that figure times 50% and it will cost Shell $2.356B in taxes under R.B.T.
– an amount paid to both the greedy shareholders - times two - and to the taxpayers

RESULT #1 = $4,712,903.80 in excess profit for just three months

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So I also looked at ExxonMobil USA

• ExxonMobil Corporation first-quarter 2022 earnings of $5.5 billion; first-quarter results included an unfavorable identified item of $3.4 billion associated with the planned exit from Russia Sakhalin-1; earnings excluding identified items were $8.8 billion, an increase of more than $6 billion versus the first quarter of 2021
• ExxonMobil website shows first-quarter 'cash flow' of $48 billion and earnings of $23.040 billion for profits of 47.9%.
• The Trailing Twelve Months (TTM) column on SeekingAlpha shows total revenues of $309.269 billion and 'gross profit' of $98.367 billion

Here's the math (or skip ahead)
Divide the $98.367B profit by the $309.269B revenue and it comes out as 31.80% profit! - twice what Shell made.
Thus 21.80% excess profit times the $309.269B revenue comes out as $6,742,064.20.
Multiply that figure times 50% and it will cost ExxonMobil $3.371B in taxes under R.B.T.
– an amount paid to both the greedy shareholders - times two - and to the taxpayers

RESULT #2 = $6,742,064.20 in excess profit for just three months

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While families on tight budgets struggle to pay the sky-high price of gas at the pump, these five oil companies more than tripled their profits in the first quarter of 2022: Shell, ExxonMobil, BP, Chevron, and ConocoPhillips brought in an average of over 200 percent more in profits than in the first quarter of 2021 – a total of more than $35 billion in profits in just three months.

• Shell’s first quarter profits were 180 percent higher than in the first quarter of 2021. Shell made $19.3 billion in total profits in 2021 on revenue of $272.657B (Shell bought back $8.5 billion in stocks).

• ExxonMobil’s first quarter profits were 220 percent higher than in the first quarter of 2021. ExxonMobil made $23 billion in total profits in 2021 on revenue of $285.64B (ExxonMobil pledged $30 billion in stock buy backs).

• Chevron’s first quarter profits were 280 percent higher than in the first quarter of 2021. Chevron made $15.6 billion in total profits in 2021 on revenue of $162.465B (Chevron plans $10 billion in stock buy backs by the end of 2022).

• BP’s first quarter profits were 140 percent higher than in the first quarter of 2021. BP made $12.8 billion in total profits in 2021 on revenue of $164.195B (BP expanded its stock buyback plan to $2.5 billion in 2022).

• ConocoPhillips’ first quarter profits were 380 percent higher than in the first quarter of 2021. ConocoPhillips made $8 billion in total profits in 2021 on revenue of $48.3B (ConocoPhillips plans $10 billion in stock buy backs in 2022).

These five oil corporations made $78.7 billion in total profits on combined revenue of $933.257 billion in 2021.

RESULT #3 = 2021 $78.7B total profits were only 8.43% of revenue in 2021, but much higher in the first quarter of 2022.

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• Shell first-quarter 2022 revenue was $83.164 billion with quarterly profit of $9.13 billion

• ExxonMobil first-quarter 2022 'cash flow' was $48 billion with quarterly profit of $23.040 billion

• Chevron first-quarter 2022 revenue was $52 billion with quarterly profit of $6.3 billion

• BP first-quarter 2022 cash flow was $51.220 billion with quarterly profit of $6.2 billion

• ConocoPhillips first-quarter 2022 revenue was $19.29 billion with quarterly profit of $4.3 billion

RESULT #4 = combined first-quarter 2022 revenue of $253.674B and total profits of $48.97B compute as 19.3% profits, for 9.3% in excess profits – which were generated entirely by corporate war-profiteering: $23.59 billion extracted from American consumers because the pirates of Wall Street are unregulated.

Copyright 2022 by G.E. Nordell, all rights reserved

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