1. #1
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    Default Windfall Profit Tax Needed

    >>Anheuser-Busch surprises analysts


    Copyright 2005 Houston Chronicle

    Anheuser-Busch Cos., the world's largest brewer, reported better-than-expected first-quarter profit after the biggest sales gain in more than a year. The shares rose 5.3 percent.

    Net income was $499 million, or 64 cents a share, more than analyst estimates. Sales climbed 5.4 percent to $3.76 billion, the St. Louis-based company said Wednesday.

    Domestic beer sales volume jumped 4.6 percent as the company raised prices on Budweiser and Michelob 4.3 percent since December. Total beer volume rose 11 percent as Chief Executive Officer Patrick Stokes reversed price cuts after they eroded profit last year. He also added new advertising and boosted store displays to win back drinkers who had switched to wine and spirits.

    A year earlier, the company had net income of $500 million, or 64 cents.

    Anheuser-Busch's market share rose to 51.2 percent, from 51.1 percent a year ago.<<

    This is outrageous. The price of a six pack of Budweiser has gone up to over $3. This all while Anheuser Busch is making outrageous profits. They are making money on the backs of ordinary, tax-paying Americans. There is no evidence that the higher price of ingredients is driving these unthinkable price increases.

    We should demand a Congressional investigation into Big Beer. Windfall profit taxes, as well as direct rebates to consumers are warranted.

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    Default have a drink

    I'll drink to that. We will spend whatever just to maintain our habits and buisness knows us all to well. We need the alcohol to numb the pain of ever increasing prices for profit to those who surely don't need the income. Just look at some of the retirement packages for the corporate big shots.

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    Is there any truth to the rumor that the federal tax on a gallon of gas is more than the refineries make on a gallon?
    If that is the case, then why are we talking windfall profit tax and not rebates or tax credits?
    CR
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    Quote Originally Posted by ChiefReason
    Is there any truth to the rumor that the federal tax on a gallon of gas is more than the refineries make on a gallon?
    If that is the case, then why are we talking windfall profit tax and not rebates or tax credits?
    CR
    Chief, that's not true anymore, but at one point, tax was about 1/3 of the price. A brief amount of research shows the Federal Gas Tax is 18.4 cents per gallon. IL adds 19 cpg, plus 6.55% in sales tax and storage tank recovery fees (although a 2nd website showed IL having total taxes of $0.54/gal...I don't know what the discrepancy is).

    A barrel of oil is 42 gallons. At $72/bbl, that's $1.71/gal of crude. At a retail price of $3/gal for gas (including taxes), this gives about $0.80/gal to refine, ship, distribute and retail gasoline. And each step needs a profit to stay in business.

    I'm not sure how to work it in mathematically, but approximatley 46% of a barrel becomes standard gasoline.
    My comments are sometimes educated, sometimes informed and sometimes just blowing smoke...but they are always mine and mine alone and do not reflect upon anyone else (especially my employer).

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    Quote Originally Posted by ChiefReason
    Is there any truth to the rumor that the federal tax on a gallon of gas is more than the refineries make on a gallon?
    If that is the case, then why are we talking windfall profit tax and not rebates or tax credits?
    CR
    Sean Hannity was talking about this yesterday. He stated that the federal tax was like .18 per gallon, with the highest state tax being in NY. But NY does it different than every other state...they tax on the price, not per gallon. So the higher the price goes, the more money the State of NY makes. Pretty good, huh? As of yesterday, the state tax in NY was about .68 per gallon.

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    Go figure, high state and federal taxes account for the vast majority of "profit" from gas. Ostensibly this money is supposed to pay for roads. And how are the roads where you live?

    Yet all the twit, moron ploticians want to investigate gas companies which make a profit off of fuel but don't talk one bit about reducing taxes on fuel.

    Typical.
    "Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like." Will Rogers

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    Doesn't really matter what the tax is on the gasoline during constrained supplies of whatever type -- crude, refining capacity, hurricane just wiped out every other gas station for fifty miles around.

    What we're seeing now is how markets work -- the price has gone up, there are no gas lines unlike the 1970s when Nixon & Carter & Congress engaged in things like price controls, windfall profit taxes, etc.

    Price and supply come into equillibrium...as much as we want to bitch about it.

    If you want to look towards any kind of fair and justifiable legal relief...dust off the anti-trust regulations.

    The net affect of squeezing "efficiencies" out of the industry by consolidating companies is they could close "surplus" refineries. Now they whine they don't have the refining capacity to handle switching from gas to heating oil, from mtbe to ethanol, from someone in North Bumblebut Alaska sneezed at 9am last tuesday...because they've spent money buying each other instead of building plants to compete with one another.

    Somethings like electric utilities are best operated locally as monopolies so you regulate them tightly. Petroleum best operates as lots of competitors, so you minimize the regulations but keep them from becoming overly consolidated.

    ===========
    Also...
    1) There's not much we can do about the price of crude, and the speculation that is driving part of the price today. It's internationally fungible...if we don't want to pay it but Europe, China, or India will...that sets the price.

    2) We can adopt national standards like enhanced fleet economy standards -- such as the recent move to bring soccer mom trucks into the same class as passenger cars.

    HOWEVER, the best driver to more efficient energy use...and investments in more efficient equipment, and investments in alternative energy sources...is high prices for the alternative (oil).

    Pay me now, pay me later...you can pay tax subsidies to support research & rollout of solar, wind, pebble bed reactors, coal gasification, blah blah blah...or you can not worry about the taxes and when prices get high enough to make those technologies economically sensible...they'll get the investments.

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    Amen brother Dal.

    The sooner we get our act together on technology, efficiency, and alternative energy, the sooner we can extend our collective middle finger at the middle east.

    We split the atom. We put man on the moon. Surely we can eke more performance out of less energy and still live well enough to make an islamic radical apoplectic with envy.
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    Demand for beer is up because we're all so stressed over high gas prices.
    "Be polite, be professional, but have a plan to kill everybody you meet.
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    Last data I saw, which was pretty recently, is that the profit margin on gasoline is about 9% of the pre-tax price, or less than .20 per gallon.
    Compared to many other retailers, that is not especially high.

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    I think this calls for a national BEER-OUT day! On May 19th, nobody buy beer all day and we'll really show them who's boss around here.
    Even the burger-flippers at McDonald's probably have some McWackers.

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    Quote Originally Posted by nmfire
    I think this calls for a national BEER-OUT day! On May 19th, nobody buy beer all day and we'll really show them who's boss around here.
    Let me know how you make out with that. I'll be at the bar.

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    Making a note to stock up the day before .....

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    Sean Hannity was talking about this yesterday.
    Now there's a shocker. George listens to Hannity.

    Now if Adolph Coors was the President of the US, you might have a point in your analogy. BTW, I am not an advocate of windfall taxing as such taxes would only be paid by those who have gouged the markets and consumers.

    I would be happy to see a simple reinvesting of profits into increased refining capability to close the "supposed" supply/demand problem.

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    Quote Originally Posted by GeorgeWendtCFI
    Let me know how you make out with that. I'll be at the bar.
    So will I, with a Long Island Ice Tea. I never said you couldn't drink any alcohol, just beer. Hell, I hardly drink beer to begin with so I could care less!
    Even the burger-flippers at McDonald's probably have some McWackers.

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    Ask and it shall be delivered. BAM!

    Shell unveils plans for 'biggest refinery in US'
    Apr 28 11:03 AM US/Eastern

    Anglo-Dutch oil group Royal Dutch Shell has announced plans to make its jointly owned Motiva refinery in Port Arthur, Texas, the biggest in the United States.

    Shell founded the Motiva refiniery in 1998 with Saudi Refining and is considering increasing the output at the facility by 325,000 barrels per day.

    "The project would make the Port Arthur Refinery the largest in the country," Shell said in a statement on Friday.

    Output would rise to 610,000 barrels per day, higher than the 557,000 barrels per day produced by the ExxonMobil facility in Baytown, Texas, the current biggest in the country.

    "Pending necessary regulatory approvals, Motiva would expect to initiate final engineering later in 2006 and begin construction in 2007," said Shell, while underlining that a final decision to expand the facility had not been taken.

    "The new capacity would be projected to come online in 2010."

    A shortage of refining capacity worldwide has been identified as one of the reasons behind the recent surge in crude oil prices. Oil companies have been accused of failing to invest adequately in new facilities.
    Now we'll see how easily they get their "necessary regulatory approvals". My bet is that a shovel never hits the ground because the libs will block it. There is probably a tree worm there or something.

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    Default pay it forward

    It seems like our elected officials, regardless of party, are never on top of anything until it becomes something popular for them to jump on board for. Kind of like the cart before the horse. Seems like someone somewhere should be clueing these people into this country's needs, shortcomings and welfare before it becomes a national crisis. "Of the people, by the people and for the people" instead of what's in it for me.Throw 'em all out and start over. Oh, gee, that might be like lets not buy beer tomorrow. Then again who do we have thats not on somebody's payroll.

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    A shortage of refining capacity worldwide has been identified as one of the reasons behind the recent surge in crude oil prices.
    Let me get this straight, there is a lack of refining and that causes crude prices to rise due to supply and demand?

    If we are unable to refine crude oil into gasoline at a fast enough rate, wouldn't that create a surplus of crude, awaiting refinement? And if there was a surplus of crude, wouldn't it's value drop?

    It's been many, many years since my Economics 101 course, but I'm confused.

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    Quote Originally Posted by E229Lt
    Let me get this straight, there is a lack of refining and that causes crude prices to rise due to supply and demand?

    If we are unable to refine crude oil into gasoline at a fast enough rate, wouldn't that create a surplus of crude, awaiting refinement? And if there was a surplus of crude, wouldn't it's value drop?

    It's been many, many years since my Economics 101 course, but I'm confused.
    Your changing the debate in the middle. You said:
    I would be happy to see a simple reinvesting of profits into increased refining capability to close the "supposed" supply/demand problem.
    That's what I posted. You said you'd be happy. Now be happy dammit.

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    "supposed"
    See the quotes? I was indicating a slight lack of faith.

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    Quote Originally Posted by E229Lt
    Let me get this straight, there is a lack of refining and that causes crude prices to rise due to supply and demand?

    If we are unable to refine crude oil into gasoline at a fast enough rate, wouldn't that create a surplus of crude, awaiting refinement? And if there was a surplus of crude, wouldn't it's value drop?

    It's been many, many years since my Economics 101 course, but I'm confused.
    Your economic analysis is correct, if you limit it to the scope you present. However, crude prices are affected by: limited production; demand; cartel pricing; geopolitical instability in the primary oil region; and market speculation. Gasoline prices are affected by: crude prices; limited refinery capacity; demand; and transitional fomulae (winter/summer blends).

    Taken as a whole, there should be no surprise that gasoline costs $3/gallon. The surprise should be that we enjoyed $1.50/gal for so long.
    My comments are sometimes educated, sometimes informed and sometimes just blowing smoke...but they are always mine and mine alone and do not reflect upon anyone else (especially my employer).

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    Quote Originally Posted by LaFireEducator
    Last data I saw, which was pretty recently, is that the profit margin on gasoline is about 9% of the pre-tax price, or less than .20 per gallon.
    Compared to many other retailers, that is not especially high.
    Anyone who knows anything about corporate accounting knows what is reported is easily half to a third of what is actually happening.

    Good grief. You think all those Harvard and Wharton MBA's don't know how to hide a dollar or two in a corporation the size of Exxon/Mobil?
    Politics is like driving. To go forward select "D", to go backward select "R."

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    A dollar or two, sure.

    Are you actually saying they're hiding 16 Billion dollars or so?

    $8.4 Billion in profits on $89 Billion in revenue in the last quarter...

    I don't think Enron on a creative day could figure out how to hide that much money that quickly.

    That's not to say there isn't unfair stuff going on, it's just let's be realistic with the arguments.

    One interesting point is that the gas stations (most of which are independently owned or franchised) make about 10 cents...not percent, but cents, per gallon and that's stayed consistent from the days of $1 or so gasoline.

    If they built a 10% profit into their prices like the oil refiners do, we'd still reach this price level the market is bearing but the percentage of the sale price going to the refinery would be less --

    As it works today (squint a little, round a little...assume fairly elastic demand that people will stop buying at a certain price point...)
    $3/gallon...
    - $0.10 for the gas station...
    $2.90/gallon "wholesale"
    $0.29 to refiner...

    If the gas stations made 10% instead:
    $3/gallon
    - $0.30 for the gas station
    $2.70/gallon "wholesale"
    $0.27 to the refiner.

    It's not in hiding the dollars the corporations screw with people.

    It's in the math in plain site -- boosting their profit by 10% cuts the local owner's profits by 66%.

    Control of capital manipulates where the profits aggregate (God, why do I think that came from the deep recesses of my mind of some economics book I read decades ago?).

    Milk is another industry you see similiar manipulation -- farmers are by and large selling the milk for what they did 10, 20 years ago. The processors and stores have increased the prices tremendously, but keep the profit to themselves by a very similiar system...some percentage to me, some fixed amount to you...

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    The more specific answer to accounting...

    "Net Cash Flow" for last quarter by Exxon was $15 Billion

    "Income Before Taxes" was $15.5 Billion...yes, the difference between actual cash and how income is calculated is do to numerous accounting manuevers about depreciation, accrued expenses, pre-paid this and that, etc.

    But the cash is pretty hard to manipulate...which is why it had less cash coming in then it recognizes as income. We're not talking about the ability to manipulate something by 2 or 3 fold to "hide" money.

    ======
    The other interesting tidbit from the quarterly filings...

    Of $89 Billion in revenue...

    $25 Billion went to various governments in the form of Income, Excise, and "Other" (like property) taxes.

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    I guess you guys got me. I'm sure there is no manipulation being done. Everything is copacetic.
    Politics is like driving. To go forward select "D", to go backward select "R."

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