Posted on 04/09/2008 1:11:54 PM PDT by econjack
Obama's newest TV ad tells about Exxon making $40 billion and how he's going to institute a windfall profits tax on the oil industry. Let's consider that idea.
First, taking money away from the oil companies helps me at the pump by...??? It seems to me that the windfall profits tax ends up in Washington or in some politician's freezer. I fail to see how that lowers the price I pay at the pump. More than likely that money will get sucked off into new programs that make people more dependent on the gov't...not what I want.
Second, while you may not like the oil companies, they do explore, drill, produce, refine, and distribute oil products. The economics of the situation tells me that some part of their profits will be used to produce more oil. On the other hand, sending a new tax to Washington does nothing to increase the supply of distillate fuels.
Third, you can't fool me again. You tried the tax idea before (e.g., the Alternative Fuel Tax) back in the 1970's and I'm still waiting to see some new fuel that you hacks in Washtington produced.
If you want to lower our cost at the pump, how about this:
1. Kill the federal taxes on gasoline and diesel fuels, at least in the short run while new supplies ramp up.
2. Offer incentives for states to abandon their fuel taxes, at least until new supplies come on line.
3. Have the EPA mandate only three blends of gasoline. As recently pointed out:
"As recently as the early 1990s, the nation's gasoline supply was fungible. The same regular, mid-grade, and premium fuel was sold from coast to coast. But today, we have a bewildering variety of gasoline recipes in use across the country. Each of these specialized blends was designed to help clean the air, but the decade-old track record for the experiment in boutique fuels indicates that it has done more economic harm than environmental good.
"Nobody even knows for certain how many different gasoline blends are in use at any given time. AAA has put the number at "more than 15." One pipeline operator says it has to cope with 38 types of gasoline, many of which have to be shipped on a segregated basis. Sen. John Kerry has made a campaign promise to simplify the 'more than 300 local and state fuel regulations in the U.S.' "(http://cei.org/gencon/019,04157.cfm)
If the tree huggers want to complicate things, let them pay higher prices through a voluntary donation to Washington.
4. Streamline the process of permitting new power plants and refineries. The current process is so bad that there hasn't been a new refinery built in two decades and the same is true for power plants. If Teddy gets PO'ed at seeing windmills in his ocean view, too bad. Perhaps he can just get in his car and take a long ride over a bunch of no-railing bridges.
5. Read a book on economics. Politicians have no clue how the economic system works. It's high time they learned.
Hussein Obama is this country’s worst nightmare, that is outside of Hildabeat.
We could have the tree huggers purchase a tree tax credit from algore.....
Good article
But unfortunately, nobody would even be allowed to pose that question.
This is utter BS...the oil companies profit margins are 10%...10%!!! Would the brainless Osama have them operate for free? Would the idiots in the democratic party tax their friends in Silicon Valley since their profit margins run 50%....????? These stupid assholes.....total braindead fools!
I’ve seen both the rat candidates referred to as socialists. That is just not accurate. They are both communists.
Did Obama mention that Exxon paid $30B in taxes in 2007?
I propose a windfall profits tax on politicians.
Yeah so Obama can add to the 120 billion in taxes the government made off of Exons 40 billion in profit.
Hmmmmm....following in the steps of Mugabe...and Chavez? How special.
Bravo for telling it like it is..
Every day we get closer and closer to seeing what Jimmy Carter’s Second Term would have been like...
You're absolutely right. But, when I ask students what they think about the idea, they think it's great. When I ask what the profit margin is for the oil companies, they say "over 100%". Obama misleads the public by stating Exxon "made $40 billion", when that's actually total sales, not profits. Smart people (i.e., us Freepers) need to spread the word about this BS before it gets out of hand.
LOL! Actually, I did pretty well with some zero-coupon bonds thanks to Jimmy's 21% prime interest rate!
If we had a windbag profits tax, Obama and the rest of the liberals would be broke.
Success Tax.
I remember driving my VW bug from Omaha back to my parent’s house in Ohio in the early 1970’s with two 5 gallon cans of gasoline in the back seat “just in case”. Talk about dumb!
"Unfortunately, he is a powerful speaker with an appeal to the emotions. He leaves little doubt that his idea of the 'challenging new world' is one in which the Federal Government will grow bigger and do more and of course spend more.... Under the ... boyish haircut is still old Karl Marx ... There is nothing new in the idea of a Government being Big Brother to us all."
LOL...love your tag line!
None of the ideas that the author suggests will fly two feet off the ground. The Left has a single goal: Weaken the U.S. by reducing energy consumption in this country. That is the goal. And along the way, make a lot of money for the Government and Al Gore as a fringe benefit. It really isn’t anymore complicated than that.
Great quote...did not remember that one.
Exactly! Who is to say what’s ‘windfall’ ? The sheer f’n arrogance of ‘I know what’s better for you’, or, ‘I (the government) should decide who needs what and how much’.
BP and Conoco are going ahead with their first phase of the $30 billion Alaska Gas Pipeline. If O’Bama or Hillary!08 could actually do a windfall tax this project and many others wouldn’t be happening.
I think the reason you're probably right is because most people don't know the facts. My goal was to point out how stupid a windfall profits tax is. If enough people "get educated", perhaps then there might be some change. Still, I'm not holding my breath.
Here’s how it works stupid,
You tax the corporations they pass it along to the consumer in layoffs and higher prices.
What's not to like about the oil companies? Their product ultimately affects just about every aspect of our modern life. Try grocery shopping, having surgery, or going through one hour at work without coming into contact with a petroleum-based product in one form or another.
Not to mention that much of their "evil" profits no doubt find their way into many people's pension accounts and 401K's. If you really think about it, Big Oil probably does much much more for us on a daily basis than government would ever dream of - and more cost effectively, too.
You'd be amazed how many "educated" people don't get it. I am surrounded by Ph.D.s and when this subject came up, they acted like high school freshmen in their depth of understanding of the subject. When I ask them how sending more money to Washington is going to put cheap gas in my tank, I'm labeled a "right winger" and they get up and leave. They won't debate the issue because they can't.
I only wish more people thought like this...
No need to educate anyone about what a Windfall Profits tax would do to the economy.
Just refer to Jimmuh Carter, when he imposed one during his one and only ‘70’s term. The resulting shortages in refined product and the sudden immediate halt on domestic drilling, gave us legendary gas rationing, and lines of drivers waiting to get fuel.
It also inspired double-digit inflation, double-digit unemployment and interest rates around 18% APR.
Those who do not learn from history are doomed to repeat it.
How much do the big nasty ugly oil companies make on each gallon of gas sold?
How much does government at all levels make off each gallon sold?
How much has government at all levels "made" vis a vis the oil companies?
Now --- where does the outrage belong?
And I wish more people thought - period!
LOL... some exec where I worked wanted to trade his brand new Lincoln for my Datsun 260Z. When I said sure and asked if he had the title for it... he hemmed/hawed and backed down. Either he didn’t own it... or he realized that America wouldn’t stand for Congress’s meddling.
Hillary has already told the oil companies, “We are going to take your profits...”
I like the idea of the US having deep underground strategic reservoirs of refined fuels. Here’s the logic:
1) Everyone agrees that the US has a refinery shortage. But on top of that, refineries each year have to determine how to (expensively) reconfigure themselves to produce different amounts of the three main product groups: light, medium and heavy distillates. This means they have to guess what consumption will be, and not produce too much or too little of any particular fuel or distillate, be it gasoline, liquid natural gas, home heating oil, diesel, etc.
2) Refineries (which almost exclusively use “light/sweet” (more light distillates, less sulfur) crude oil, not the abundant “heavy/sour” crude, if they can) are very problematic because they don’t have a production buffer helping to stabilize the end products.
3) Thus any disaster that puts one or more refineries out of action for a while affects the entire nation. We have too fine a refinery production edge for our national security.
4) Refineries have long term contracts that stabilize the price of crude oil coming in, and they benefit enormously from this stability. So what having a “flow-through” strategic reserve of refined products would accomplish would be the same thing but on what flows out of the refineries as well.
What this would mean to the typical American on the street would be a tremendous price stabilization. Gasoline would not fluctuate more than a penny or two in a year, nor would home heating oil or liquefied natural gas. The energy sector could completely ignore the fluctuations of the spot oil market, unless they lasted for years.
5) The bottom line to all of this is that petroleum products would be treated more like agricultural products, except the government would not need to interfere by stabilizing the price, but by stabilizing production, which because it is so relatively stable already, would not need extensive interference, just the creation of a “production buffer”.
6) Additionally, the US government already has a strategic petroleum reserve of about 3/4ths of a billion barrels, good for about a 60-day national supply. However, it is a reserve of unrefined crude oil. By creating a strategic *refined* petroleum reserve, in times of disaster it takes the refineries out of the loop entirely. Even if half of our refineries are destroyed or cannot operate, we will still have a supply of refined products while the remaining refineries produce what is needed from the SPR (crude).
This might protect the US economy for as long as six months.
Ed Markey wants them invest 10% of their profits in Alternatives that will put them out of business. He, is an idiot.
There are hundreds of thousands of people who have 401k’s that invest in Exxon etc. Windfall taxes would have a negative effect on just about everyone. It would also INCREASE the price of gas. Simple supply and demand. Most “Americ(k)ans” don’t understand anything outside of a new set of spinners for their SUV. Osloba knows that.
As long as he is playing the worn-out class warfare card, I suggest that we put a whopping tax on politicians who enrich themselves while in office and double that tax on those who enrich themselves by taking foreign money after they leave office. At least the oil companies provide a useful product.
If anyone deserves a punitive tax, it’s that grifter from Arkansas who made 109,000,000 in the past seven years and produced absolutely nothing of value in the process.
Perhaps someone from the oil industry can correct me if I'm wrong, but refined products like gasoline and jet fuel have a relatively short shelf life before they deteriorate while crude has a virtually infinite shelf life.
How about a tax on windfall profits from shady land deals?
“I propose a windfall profits tax on politicians.”
Perhaps you meant “politician hot air” tax. That would really raise a lot of tax money.
Yes, sort of like the Liberals who forced the Tobacco companies to advertise to the Public to quit smoking and how harmful that smoking is to their health. It all boils down to doing penance for their evil sins.
The Oil companies should just stop producing immediately, because they already only make a 10% profit on what they produce. A windfall tax would stop them from being able to afford exploration and R&D in drilling technology.
Imagine the uproar from the public if they can no longer get fuel because the Government shut down the Oil companies by forcing them out of business?
Exxon's total revenues during the past 12 months = $361.71 billion.
Exxon's net income after tax = $40.61 billion
I'm no fan of Obama's tax proposal, and Exxon's profit margin is approximately 10%.
I wonder how many teacher’s retirement funds hold oil company stock?
You are correct. Distillates are no longer stable when they are separated from their molecular companions. Their shelf life is very short and the octanes/ketanes drop rapidly, regardless of the container they are stored in.
The idea of storing refined distillates in mass quantities is outright dangerous if not ridiculously difficult.
My family (four kids aged 2 - 8) drove from the DC suburbs to Squam Lake in NH in 1979 during the Carter induced gas crunch. We hat metal gas cans tied to the roof of the station wagon (the old kind with the faux wood paneling on the side). I think if a bird had pooped on our car, a mile of interstate would have blown up...
Profit margins for oil companies are 8 or 9%, lower than many other industries.
I don’t believe that oil stocks have shot up in price over and above the performance of stocks in general. And I don’t know that these companies have paid out abnormally large dividends.
So, tax the oil companies and investors will take their money elsewhere.
This is probably tenth-grade economics - and therefore over the head of many liberals. :)
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