The Wall Street Journal has a take down of Barack Obama’s call on Friday for a tax on “windfall profits” to pay for additional stimulus checks. Dem use of the “windfall profits” mantra is fast and loose with ecomomic realities. For businesses, profit margains is the accurate way to measure any business’ success.

Take Exxon Mobil, which on Thursday reported the highest quarterly profit ever and is the main target of any “windfall” tax surcharge. Yet if its profits are at record highs, its tax bills are already at record highs too. Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion. That sounds like a government windfall to us, but perhaps we’re missing some Obama-Durbin business subtlety.

Maybe they have in mind profit margins as a percentage of sales. Yet by that standard Exxon’s profits don’t seem so large. Exxon’s profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

So, oil companies make about a 10% profit on its investment. As Obama and Durbin want to tax Exxon again on top of being taxed already. With the average oil company profit being at less than 9%, the only way that oil companies can sustain vaibility would be to raise its prices at the pump. Anyhow, how do oil companies compare to othier industries in profit margains: The WSJ tells us:

If that’s what constitutes windfall profits, most of corporate America would qualify. Take aerospace or machinery — both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau’s industry rankings. The latter two double the returns of Big Oil, though of course government has already became a tacit shareholder in Big Tobacco through the various legal settlements that guarantee a revenue stream for years to come.

Obama’s increasingly bizzare statements about the issue continues to impress. What he refers to as our “addiction” to oil he says can be dealt with by simply making sure you have enough air in your tires. His proposal at additional taxes on oil companies will only result in increased cost at the pump - a cost whose burden will be felt greatest by working families.

The WSJ goes further in its overview and closes with the following:

The point is that what constitutes an abnormal profit is entirely arbitrary. It is in the eye of the political beholder, who is usually looking to soak some unpopular business. In other words, a windfall is nothing more than a profit earned by a business that some politician dislikes. And a tax on that profit is merely a form of politically motivated expropriation.

It’s what politicians do in Venezuela, not in a free country.

So what is Obama’s and Durbin’s motivation? Is floating the windfall profits tax a trial balloon for voters? As both men know implementation of additional taxes on the oil industry will result in higher costs at the pump one can only wonder what their motivations might be.