April 28, 2006
Exxon Mobil has just reported first-quarter net income of $8.4 billion. Call it a windfall, but do you really want the government to tax it away, asks Investor's Business Daily (IBD)? IBD notes:
- Oil companies pay their fair share of taxes; Exxon Mobil paid $7 billion in the first quarter of this year, almost as much as the $8.4 billion left over for the shareholders.
- Profit is not the same as executive compensation, which some have claimed is excessive, particularly at Exxon Mobil. Although pay and benefits, as corporate expenses, work to reduce profits, if a CEO is overpaid, the real victims are the shareholders, not the buyers of the company's products.
- Profit today is product tomorrow. Exxon Mobil spent $4.8 billion on capital and exploration costs in the first quarter alone.
Is there any alternative to this business model? No. The industrialized world knows better than to go the route of state ownership, and politicians in this country should know better than to weaken a productive, efficient industry by attacking the profits that make it run, says IBD.
Source: Editorial, "Eek! Profits," Investor's Business Daily, April 28, 2006.
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