It's not the one you already know about; it's not the "windfall" profit Hillary Clinton is going to take away from Big Oil.
No, this is a record amount of income taxes paid: $9.32 billion, the most ever paid in a quarter by a US corporation.
The previous record holder? Exxon Mobil. When was it set? First quarter, last year.
That isn't the whole story either. Emphasis mine.
You can see Exxon's tax contributions go far beyond income tax. Exxon's total tax burden in Q1 2008 was nearly $30 billion, or three times Exxon's profit in that quarter.
EXXON MOBIL CORPORATION FIRST QUARTER 2008 (millions of dollars, unless noted) Total revenues and other income 116854 Total costs and other deductions 96662 Income before income taxes 20192 Income taxes 9302 Net income (U.S. GAAP) 10890 Dividends on common stock Total 1879 Per common share (dollars) 0.35 Income taxes 9302 Sales-based taxes 8432 All other taxes 11607 Total taxes 29341
They also paid nearly $2 billion in dividends. Many retirees' mutual funds have benefited. I wonder if Exxon could still pay dividends at that level if Hillary took $5 billion out of their profit? Do you think she'd make better investments than Exxon? Cattle futures sound good, she's done well there in the past, and also with other people's money.
How come we never hear anything about taking away windfall tax revenues? Oh wait, we are hearing McCain and Clinton say they want a 3 month reduction in Federal tax on gasoline. Not to worry, Clinton will get it back from the oil companies who make it possible. McCain will fail to control Federal spending and thus get it back from your grandchildren.
H/T Carpe Diem, where there are some nice charts on this topic.
Update: 9:55 AM 3-May The Wall Street Journal comments:
You may also be wondering how a higher tax on energy will lower gas prices. Normally, when you tax something, you get less of it, but Mr. Obama seems to think he can repeal the laws of economics. We tried this windfall profits scheme in 1980. It backfired. The Congressional Research Service found in a 1990 analysis that the tax reduced domestic oil production by 3% to 6% and increased oil imports from OPEC by 8% to 16%. Mr. Obama nonetheless pledges to lessen our dependence on foreign oil, which he says "costs America $800 million a day." Someone should tell him that oil imports would soar if his tax plan becomes law. The biggest beneficiaries would be OPEC oil ministers.Update: 9:36 AM 4-May Clinton Video added.
There's another policy contradiction here. Exxon is now under attack for buying back $2 billion of its own stock rather than adding to the more than $21 billion it is likely to invest in energy research and exploration this year. But hold on. If oil companies believe their earnings from exploring for new oil will be expropriated by government – and an excise tax on profits is pure expropriation – they will surely invest less, not more. A profits tax is a sure formula to keep the future price of gas higher.
Exxon's profits are soaring with the recent oil price spike, but the energy industry's earnings aren't as outsized as the politicians seem to think. Thomson Financial calculates that profits from the oil and natural gas industry over the past year were 8.3% of investment, while the all-industry average is 7.8%. And this was a boom year for oil. An analysis by the Cato Institute's Jerry Taylor finds that between 1970 and 2003 (which includes peak and valley years for earnings) the oil and gas business was "less profitable than the rest of the U.S. economy." These are hardly robber barons.