Skip to comments.Government, not big oil, is the big beneficiary of high oil prices
Posted on 08/28/2006 8:59:03 AM PDT by theBuckwheat
Oklahomas Golden Opportunity
With gasoline prices exceeding $3 per gallon throughout much of the United States, motorists are feeling a considerable amount of pain at the pump. Many elected officials are feeling pressure from their constituents to do something...
Doing something in this case usually means railing against the evils of Big Oil. Of course, worldwide supply and demand are the primary determinants of gasoline prices, but that does not stop the wild allegations often centered on accusations of price gouging against oil companies every time they raise prices or announce a quarterly profit. Accusations of gouging then typically lead to calls for government intervention through investigations and punitive taxes on the industry, such as a levy on windfall profits.
Governments Oil Profits
Always overlooked in this scenario is the fact that government coffers benefit from high energy prices just as much as the oil industry.
According to Department of Energy data from 1977 to 2004, federal and state governments extracted $397 billion by taxing the profits of the largest oil companies and an additional $1.1 trillion in taxes at the pump. In today's dollars, that's $2.2 trillion enough to buy a Toyota Prius for every household in the nation.
In fact, oil companies paid three times more in taxes than they earned in profits during those 28 years. Remarkably, there are some in this country who think big oil is not paying its fair share and that a windfall profits tax is needed to punish the oil industry for their excessive profits. Politicians who feel the pressure to do something are likely to ignore these facts, however.
The idea that raising taxes on oil companies would somehow lower the prices of gasoline at the pump is completely nonsensical. ...
(Excerpt) Read more at ocpathink.org ...
Exactly... Government(local,state or fed) taxing ANY ENERGY is obscene.. Raises the prices of literally everything.. and is a drag on the economy..
Odds of a remedy is remote.. On the otherhand could be a beautiful platform for any budding politician... make ANY ENERGY TAXES ILLEGAL...
"Government, not big oil, is the big beneficiary of high oil prices."
I agree 100%. The problem I have with the oil companies is the lack of inspections and maintence they do on their equipment.
1] Remarkably, there are some in this country who think big oil is not paying its fair share and that a windfall profits tax is needed to punish the oil industry for their excessive profits.
A windfall profit tax will punish the consumer. The corporations will simply raise Thor prices to cover the cost of the new tax.
The question then becomes how can prices be lowered? The answer, at least in part, is already before Congress. A bill currently before the House The Fair Tax Act H.R.25 and the Senate version(S.25) will replace our current federal income tax with a Consumption/National Retail Sales tax.
How can this lower prices? Currently any good is taxed at each stage of production. These hidden/embedded taxes known as value added taxes(VATS) raise the cost of all goods. The Fair Tax Act will abolish business to business taxesFair Tax FAQ#2. Companies will be forced to pass on the cost savings in the form of lower prices due to competition.
How can The Fair Tax help on the state level? States can choose to conform to The Fair Tax Fair Tax FAQ#25. By doing so states will realize The Fair Tax will have a much broader and more stable tax base than the income tax because the tax will be collected with every purchase. This is true even when people are unemployed. No tax can be collected from a person's income who is not working. The broader tax base will result in states raising the same amount of state sales tax with a lower tax rate. Administrative costs will be considerably lower. Only one additional line will be necessary on the state sales tax form to collect the federal consumption tax. Conforming states will receive will be paid a fee for collecting the tax. Visit theAmericans For Fair Taxation website for more information.
Great find!! Thanks for posting. Too bad only we Freepers will see it.
bump and thanks for the ping.
Actually it's both: record profits and record taxes.
How many and which Oil Companies have you worked for?
(Just want to know from where do you derive your expertise from)
Buckwheat I nominate you as "KING OF AMERICA"
That would be North America, not including Canada or Mexico.
just the USA
Crying shame we don't have Kings anymore... you'd make a good one.
Been seeing a lot of exploding gas pumps in your area, have you?
Alaska's Gummint is funded 90% on oil revenues. Even with the partial shutdown at Prudhoe, Alaska expects a surplus of $6 million this year. Or this week. One of those.
I want you to understand that I don't have any expertise. I know about the pipeline in Alaska and the electric companies that haven't built anything in years. I work in wastewater treatment plants and you can laugh if you want. The lifetime of a wastewater plant is twenty years and I watch the maintenence that never goes on in them. If you work in the oil industry I really do hope you do more perodic maintence than gets done where I work because the customers suffer with what I witness. I know things can still break down though if things are done perodically the service is better for the people recieving the service or the product. If you actually work in the oil industry I hope you will understand how I feel.
And if the oil industry does more maintence than my industry does thats great.
Business is Business, is your plant a City, County or State facility?
Public utilities are front line fleecers of the Tax Payer, they do not have to make a profit, when they fail they float a bond.
Apples and Oranges
You won't get an arguement out of on that. The frustration is terrible though.
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