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Geez, I Just Don’t Understand People
By JLP | July 27, 2006
Check out this CNBC poll that asks the question:
Is it time for a “windfall profits” tax on oil earnings?
I voted “no” but I was clearly in the minority at 19% of the vote. With 53,263 votes cast, 81% of people said “yes” that oil company profits should be taxed. Unfortunately, these are probably the same people who vote. Where were these people when oil was selling for under $10 a barrel? Were these same people voting that Americans should be giving oil companies more money?
Topics: Miscellaneous | 16 Comments »
July 27th, 2006 at 8:45 pm
oh geez.
“We definitely need to boycott the oil companies and start hurting their pocketbooks a little bit, maybe then gas prices will come down,” wrote one MSN Money reader. “This is outrageous that we are suffering and doing without and they are just raking in the money.”
thats one the stupidest thing I’ve ever heard. I’m sure they have total control over the price of crude oil. it’s one big ass conspiracy!
please. compare to other first-world nation, we’re getting a flippin good deal, even though our rate of consumption is ridiculous.
I’mma take that poll result w/ a grain of salt, just so I wont upset my blood pressure level.
July 27th, 2006 at 8:47 pm
Any government that robs Peter to pay Paul can always count on the support of Paul.
July 27th, 2006 at 9:51 pm
People just want money wherever they can get it. Yes, it is a little suspicious about the correlation between high prices and high profits, but that is what you get from participating in a capitalist economy. Imagine how high the prices would be if it were government-controlled…
July 27th, 2006 at 10:08 pm
A tax on economic illiteracy would raise more money.
The rather blunt reality is:
1. oil and oil products are already taxed very highly – in some countries the various taxes, royalties etc paid to various governments already account for more than half the cost of petrol. Governments make much more out of the price of petrol than the oil companies;
2. oil supply is not keeping up with rising demand. The world needs more oil and althernative oil supplies. Increasing the taxes on oil companies (as distinct from oil products) will result in less money being spent on developing new sources of oil and alternative energy sources;
3. an increased tax on oil companies will not result in lower prices for oil or oil products. It is more likely to have the opposite effect – especially in the longer term;
4. if there must be increased taxes (which I personally do not advocate) increasing the price of petrol and other oil products through increased taxes on the product (as distinct from the oil companies) should help reduce demand (with a side effect of helping with the environment). Although, as others have pointed out, so far demand for oil products has been very inelastic in the face of rising oil prices.
Personally, I am all in favour of keeping the price of oil and oil products high. This will encourage reduced use of oil products and increased use of alternative energy sources with (mostly) consequential environmental benefits.
July 27th, 2006 at 10:40 pm
Kira,
I don’t think it is suspicious at all the correlation between high prices and high profits. It makes perfect sense. The oil companies aren’t setting prices. All they do is pump the stuff out of the ground.
I think more suspicious is OPEC, which sets prices through controlling supply. Now that they have a taste of these high prices, they won’t ever let oil get back to $30 per barrel.
Finally, the really troubling thing for me about oil prices is all the money we are SHIPPING OVER TO THE MIDDLE EAST, which supports idiotic governments and terrorism.
July 27th, 2006 at 11:07 pm
OPEC’s price for crude oil has little to nothing to do with the way the oil companies price this commodity. The profits made on any product is irrelevant to the whole-sale cost except for its correlation to supply and demand when futures are factored. If people want an explanation for high profit margins they can find it written within their 401k statements; and I imagine these same people would be rejoicing if their retirement funds were loaded with energy stock at this given time.
July 27th, 2006 at 11:44 pm
The next time you hear someone complain about high gas prices, ask him how he got to work that morning. If he didn’t carpool, walk, ride a bike, or take a bus then apparently gas prices aren’t that high.
High gas prices are a good thing. Sufficiently high gas prices will spur development of alternative energy sources. In fact, there’s an argument to be made that oil companies are artifically keeping prices _down_ to reduce the incentive to develop alternative energy sources.
After all, retail fuel market has shown itself to be fairly inelastic. Under those conditions you would expect to see prices contine to rise significantly until demand started to slacken.
July 28th, 2006 at 4:01 am
I call it the “Too Successful For It’s Own Good” Syndrome. Pretty unfortunate that people would vote to penalize the very thing that drives the US economy.
July 28th, 2006 at 6:46 am
I agree that there’s no need for higher taxes to ‘penalize’ the oil companies. I do however, support ending government subsidies to oil companies. Obviously with record profits they don’t need subsidies.
July 28th, 2006 at 9:15 am
Even if it made sense, with Bush in place, it would never happen.
Why don’t people ask the government to reduce the various kind of tax currently levied on gasoline? I guess maybe an even higher percentage will vote for that.
July 28th, 2006 at 11:10 am
Reducing taxes is akin to giving crack addicts a weekly govt allowance… I don’t understand why these people don’t also look to the Bush administration and ask “why are you not investing more in alternative energies?” We need to kick the oil habit so we can stop sending money to crazy people who’s only goal in life is to kill us.
July 28th, 2006 at 2:04 pm
A significant tax on oil company profits with proceeds directed into alternative and renewable energy might be the only chance we’ve got to stop destroying the planet. I’m all for it.
(Where are the conservatives when it comes to conservation, anyway?)
August 1st, 2006 at 8:44 am
I didn’t vote but there are a couple of fundamental issues here:
1. Over the past ten years, there has been heavy lobbying by big business to reduce their corporate tax liability. In essence, Exxon is making billions in profit while skirting their tax obligations. It’s very unfair and unpatriotic.
2. Many of these corporations reap double taxation windfalls. These guys setup “offshore” corporations to further avoid paying any taxes on their income.
3. While I firmly believe people/corporations should make whatever profits the market will bare, keep in mind that these companies are extracting resources from the earth that belong to EVERYONE.
4. Even large corporations like Exxon and Cheveron receive “corporate welfare” in the form of tax subsidies or outright cash payment to some extent. I as a taxpayer am subsidizing these corporations so shouldn’t I be able to demand they pay their fair share?
August 5th, 2006 at 11:58 am
You morons dont seem to understand that the call for a windfall tax does not, at its root, come from a desire for lower gas prices (although some illiterates will say so). It comes from a desire to see big oil pay their _FAIR_ share of taxes. They get billions in subsidies and tax breaks, and rake in record profits. In the meantime, the average joe has to pay higher energy prices, higher food costs, and higher taxes to pay for basic government services.
Why are multi-billion dollar oil companies getting handouts and tax breaks when the supposed constituency of our government (people) get squeezed?
Big business owns our government, thats why. And you’ll see more cries for them to pay their fair share in supporting the society that supports them.
August 5th, 2006 at 12:28 pm
dan,
Please. I think we’re all grown-ups here and don’t really need to call each other names.
The oil companies ARE paying their fair share in taxes.
Where’s the proof of these “handouts” you speak of?
A tax on “windfall profits” sounds an awful lot like socialism to me.
August 5th, 2006 at 5:16 pm
http://www.google.com/search?ie=UTF-8&oe=UTF-8&q=oil%20industry%20subsidy
This is typical:
http://en.wikipedia.org/wiki/Energy_Policy_Act_of_2005_Vote
In particular look at some of the criticisms.
My bad on the name calling.
There is a palpable feeling among the average consumers that oil companies, with the support of our government, are profiteering and using their influence to block any move, however small, to any alternative. They’re certainly very active in shaping energy policy and always have been. And their buddies sit in the highest seats in out government (Cheney, Rice, others).
There is no argument that demand has risen, and will continue to for the foreseeable future. Fine, scarce resource = more profit. But time to stop handing over _public_ lands for *free*, tax breaks, and subsidies. Time to stop using public money (and lives) to defend thier pipelines and fields. Thats not a free market. Let them build their own armies and pass on the cost. Time to stop giving oil companies research money for alternative fuels, a huge conflict of interest. Time for oil companies to pay a fair tax on thier profits.
Any government service could be construed as socialism. If you dont think government has a role is maintaining its constiuency fine. Vote for president Cheney again. I’m sure shrub will be signing an executive order soon that gives himself the ‘right’ to run for a 3rd term due to “The war on terror” or “enemy combatants” or “wmd” or some nonsense. And we can count on Alito to uphold that order.