Big Oil “Can’t Afford” to Pay Taxes Like the Rest of Us
Here are excerpts from two news items in yesterday and today's Wall Street Journal (still my favorite newspaper, but I'm worried).
Rangel Proposes Cuts
In Tax Overhaul Bill
"... Companies that us and accounting method known as last-in, first-out to value their inventories for tax and financial-reporting purposes would be required to shift to a new method -- a move that likely would result in a higher tax bill in many cases.
The elimination of last-in, First-out, or Lifo, would hit big oil companies and some manufacturing and retail firms. Lifo allows the value of goods held in inventory to be recorded at current prices, which reduces the taxable gain."
[In other words: Suppose Shell Oil bought a million barrels of OPEC oil for $72 a barrel last year, and now it's worth $90. Shell refines it now. Their "cost" for the raw material can be booked at $90, greatly reducing their taxable profit from the refined product. SD]
"Critics of Lifo say the method is a tax dodge that lets companies deduct costs they never incur. Lifo supporters say repealing it amounts to a big tax increase that many companies cannot afford." (My emphasis)
Then in today's Journal...
Shell's Net Grows 16%
Amid Rising Oil Prices
"Shell posted net income of $6.92 billion, or $1.10 a share, compared with $5.94 billion, or 93 cents a share, a year earlier.
Revenue at the Anglo-Dutch oil firm increased 7.7% to $90.7 billion from 84.25 billion."
I guess it's not news that the oil companies are cleaning up, using your shirt as the cleaning rag, but it's a teeth grinder to hear them poor-boy it.
Way to go, Charlie Rangel!