Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Bridge Player who wrote (72406)	6/15/2008 11:28:26 PM
From: 8bits	Read Replies (2) \| Respond to of 542122

Taxes are paid on earnings, not net cash or short term investments. Yes I know, I was just replying to Cogito. He raised the issue of Exxon's cash on the books, I suppose because.. well I don't know why. I countered by pointing out that after the debt is removed Microsoft's and Exxon's cash and short term investment's are quite close. In the year ended 6/30/2007, Microsoft had 51B in revenues, and paid taxes of around 6B, or approximately 11.8%. In the year ended 12/31/2007, Exxon had 404B in revenues, and paid taxes of around 29B, or approximately 7.2%. and...your previous statement... Taxes are paid on earnings Ok so you know taxes are paid on earnings not revenues. Sure Exxon which is high volume lower margin business pays higher taxes on income but lower taxes on revenue compared to Microsoft. But Walmart pays even lower taxes on revenue because it's margins are even tighter than Exxon's. finance.google.com (Walmart paid 6.36 billion in taxes for 2007 and had 264.15 billion in revenues for a tax rate of 2.4% on revenues..) Cogito asserted that oil companies get tax breaks, my rebuttal was that may be true but their tax rates (on earnings which is what we should compare, not revenues..) are higher than many other companies including companies like Cisco, Miscrosoft, etc. Nevertheless, I don't think it is quite accurate to say that MSFT pays a much smaller percentage than your average oil company. For a few years, because of the way options were treated under taxes, Cisco paid zero income taxes, I am open to rebuttal but when someone says US oil companies are getting huge tax breaks, yet when I look at their quarterly reports and see almost half of their earnings going to taxes and know that some high tech companies have basically paid zero taxes I tend to wonder where those tax breaks for oil companies are. I have heard claims that government entities (State and US) earn more in taxes (via the excises taxes on fuel, income, and property tax) on a barrel of oil than US oil companies. It appears this might be true.