If you're in the world of "big oil" and you're investing in Spend Management to deliver shareholder returns, I'd suggest you consider going back to your free spending ways to reduce potential profits. After all, if Barack Obama wants to single out a specific profit tax above and beyond what happens to be one of, if not the highest corporate tax rates in the world, then why focus on saving anything if you'll just need to give it to the government? If you ask what I'm referring to, in early June, Obama, the Democratic Presidential nominee, suggested that, "I'll make oil companies like Exxon pay a tax on their windfall profits and we'll use the money to help families pay for their skyrocketing energy costs and other bills." In an upcoming essay on the subject in a non-procurement publication -- drop me a line if you're interested in the full op/ed piece -- I suggested that such approaches are fascinating, "but perhaps Obama forgot to read the memo that from a corporate tax perspective, the United States is already uncompetitive with the entire world. Our corporate tax rates, which hover at close to 40% already, are greater than even those of France, Germany and Japan (Ireland and Hungary, in contrast, two countries attracting significant foreign investment and both with booming economies, have corporate tax rates of less than 1/3 that of the US)."
I don't know about you, but I'm tired of hearing populist proposals that will do nothing but further damage an already fragile economy (I'm more tired of hearing about proposals to help the "working man" -- come on, I work 80 hours a week, and yet I'm not a working man according to those prone to such socialist bloviating -- but don't get me started on that point). After all, those "windfall profits" are due to rising prices in a market (oil) which has proven itself cyclical time and time again. The price will drop, eventually, but in the meantime, oil companies are using the proceeds not only to fund granny's distribution check each month, but to invest in innovation for the future (as they should). Seriously, if this type of rhetoric looks like it will become policy, I'd suggest that oil companies go back to the free spending ways of old, abolishing corporate procurement and letting executives, management, and workers hold boondoggles rather than hand over their dollars to the Federal government. I'm sure that Jean A. Baderschneider, Exxon's CPO who has one of the strongest reputations in the oil and gas business, would agree.
- Jason Busch