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555 Comments
- cardinalgill, on 06/11/2008, -12/+167Retroactive windfall taxes are a dangerously slippery slope. How can we attack one industry and not all? What about Walmart or the absolute thieves at the credit card companies (look at their profit margins...INSANE.) I'm all for lower gas prices and agree that the oil companies have reaped obscene profits, but it's our own addiction and lack of discipline that lines their pockets. I've cut my driving by more than 80% in the past year.
- emrosenb, on 06/11/2008, -17/+141but who actually gets 'big oil' profits? While executives own a lot of stock, and benefit from dividends, etc... Much of the stock is owned by government retirement plans, mutual funds, private retirement plans, etc. So in fact, by increasing taxes on oil profits, not only can they do less exploring to bring down the price of oil, people who own the stock don't make as much money.
- moracity, on 06/11/2008, -10/+105What exactly is taxing windfall profits going to accomplish?
Exxon is a publicly-traded company and its tax bill is available to all. This year, its bill is over 41% of its revenue. Yes, there are tax deferements, mainly because Exxon probably doesn't actually have 30bn in cash to send to the IRS.
The bottom line is that this single company pays more than the bottom 50% of US taxpayers (65 million people). This single company provides jobs and security to thousands and thousands of people and provides gasoline for all of our cars. Right now, they have to do that with almost half of their revenue.
Over 40% of working Americans have ZERO income tax liabilty. The other 60% of us that do pay taxes, probably pay between 10-20% when all is said an done. My personal rate over the past few years is about 15%.
Right now, there is no oil supply problem. The reality is that the price of gas is high for many reasons. Speculation and weak dollar are two suspects.
If you increase the tax on any company producing a good or service, it will slow down or stop its prodcution. This is an economic truth. Exxon is not refining oil for the good of the people. It's doing it to make money. If it cannot make money and provide a return to its investors, there is no incentive to continue.
Jimmy Carter implemented a windfall profit tax and price caps on gasoline. Guess what happened? Gasoline refinement slowed down and we ran out of gas. Exxon and other oil companies are under no obligation to produce gasoline.
The oil companies also paid LESS in taxes. This is another econimic truth - if you raise taxes, you reduce tax revenue. The ONLY way to increase tax revenue is by decreasing taxes. This creates incentive, which in increases production, which increases profits, which increases jobs, which increases the tax base, which increases tax revenue.
Taxation is not supposed to be punitive. It's there to provide income to the government. I just want people to understand that it does NOTHING to reduce the price of gasoline. Taxing the big guy is a propaganda tool to get votes. It has never solved any problem EVER. - davidryal, on 06/11/2008, -48/+138no no, you just don't understand. oil companies have a right to their profits. it's dems fault for not letting them drill that extra .2% of our daily consumption that would finally allow them to lower prices again.
idiots. - ascguy, on 06/11/2008, -5/+91If we want to truly be a capitalist society, then we definitely wouldn't have these extra taxes. And, don't forget, big corporations have a tendency to pass along any additional costs to their consumers, so, if Congress decides to up Big Oil's taxes, who do you really think is going to foot the bill? We are!
- Ifishbein, on 06/11/2008, -5/+83As much as I would like oil companies to lower prices by reducing their profits, and as much as I hate to admit it, Republicans have a point. The executives at Exxon Mobil are not going to wake up one day and go "there is a new tax, maybe we were wrong, maybe we should lower price." Instead, they are going to increase prices to offset the new taxes.
- shifty2, on 06/11/2008, -4/+73im not expert on the economy, commerce, supply and demand, or logic, but if the Fed. Govt. steps in and imposes these profit regulations, wouldn't that mean that the oil companies will just raise the price of gas more to meet their profit margin goals?
IIRC, 29 cents per gallon -> State, 18 cents per gallon -> Fed.
So if you account for the cost of production crude to gasoline, plus overhead, the rest is for the Oil company that produced it. So by limiting their profit line, they expect for gas prices to fall? - 3tcp, on 06/11/2008, -4/+63Oil companies produce something whose demand is determined on a global level and this revenue is denominated in a currency that has had a falling exchange rate. They operate in an industry with enormous upfront costs and a long period of time before production can be expanded. Forecasts at the time that new construction to increase production would have needed to begin in order to increase our current supply did not suggest that demand would be so high or that the dollar would be so weak.
The cause of these high prices are mostly due to factors that oil companies cannot control. If you want windfall taxes or not, the argument that they intentionally created this problem doesn't hold any water. If you believe that oil companies are inherently evil, their greed would have led them to increase production to capitalize on this more than they are if they had been able to foresee it. At this point the prices are so high that they're eroding their customer base. Once people have gotten into habits that use less gas and the money that it saves them they won't go back. - DeviantDragon, on 06/11/2008, -3/+47If the oil companies get taxed more...wait for it...they'll maintain the same level of profits by passing the cost onto the consumers in the form of even higher gas prices.
- pitlord, on 06/11/2008, -25/+68This is totally false!
(X^P
How can the Republicans (minority party) "block" any thing in congress? They don't have the votes. The Democrats have the majority in Congress, so SOME of them MUST have voted with the Republicans.
Of course they blocked it, it was a stupid idea to begin with! Where do you think the oil companies are going to get the money to pay for those taxes? From US by raising their prices even more.
-_-
Plus, they remember what happened the last time the U.S. tried to add "windfall profits" tax. The economy took a nose dive as companies moved more of their operations out of the country and stopped exporting goods from our factories because the taxes were too high.
0.0
This is exactly why you libtards are going to drive this country into the dirt with your socialist crap. - tbhurst, on 06/11/2008, -3/+45Good point about the public ownership of these companies. And it's not just gov't retirement plans and mutual funds that own massive portions of these companies. We're also talking about 401ks, and all kinds of other institutional-level investments that are owned by individuals in the private sector. Most folks don't keep a super-close eye on exactly how their retirement funds are invested - it actually takes quite a bit of effort to invest your money in a socially conscious way.
- Shao00, on 06/11/2008, -3/+36Listen I'm not happy about paying 85 every week to fill my tank either but how would a windfall profits tax even work? So now if you make lots of money in America the government can step in and say, hey I think we need some more of that back in taxes.... I think it sets a dangerous precedent. The real travesty with the oil companies is that we subsides them heavily. Stop giving them any government money, make they pay what they should in taxes and let’s start moving towards alternative fuels.
- tbhurst, on 06/11/2008, -16/+49Let's see, demand is down but prices are up. Can you say speculation?
- FuzzyBunny, on 06/11/2008, -7/+37You forget sir that this is the Internet, and specifically Digg. Nobody in the middle or lower classes are capable of owning stock in public companies. Any and all corporate profits go to nameless fat-cat CEO's who preferably look something like the Monopoly guy. They are evil shells of human beings and exist only to leech off of us "little guys". Never mind pesky things like economics or free markets. They must be punished.
- MrSketch, on 06/11/2008, -2/+29"wouldn't that mean that the oil companies will just raise the price of gas more to meet their profit margin goals?"
Ding! Ding! Ding! We have a winner! The myth is that corporations pay taxes on their profits, while the truth is that we pay for those taxes because they are embedded in the price of their products or services. - Stevanoski, on 06/11/2008, -19/+44Woohoo! Good for them! You want more of some thing you reward those who make it, right? You want more wind power, you reward the people who make the turbines. You want more oil...
The best friends the Saudi's have ever had are the Dem.s Every solution they try just drives up the price of oil. - moracity, on 06/11/2008, -0/+23Most people who own stocks and funds are not rich. They are people who sacrifice day to day luxuries in order to save what money they do have so they can actaully stop working one day and actually enjoy life.
We've been throwing money at Africa for 40 years or more and NOTHING has changed. Know why? Because money doesn't magically fix anything. Bleeding hearts send money over to "feel good", then go about their day. - floorman56, on 06/11/2008, -3/+26This would lower gas prices ...How?
- LordRedSnake, on 06/11/2008, -1/+22Yeah we need more Democrats who don't understand basic economics?
Who do you think will pick up the bulk of this tax burden? The oil company CEO's? Absolutely not, you and I will pay these taxes when we go to the pump and prices are even higher because of the tax slapped on top.
That's in addition to the fact that 84% of oil company shares are owned by mutual funds, pension funds, and other personal retirement accounts while executives only own 1.5%. That's the nature of publicly owned corporations. So go ahead and tax big oil's profits and it's coming out of middle america's retirement fund.
If Democrats truly want to be the party of change, they have to stop resorting to failed policies of throwing taxes out left and right and try to actually give positive incentives instead. Incentivize the development of sustainable alternative energy sources and more efficient vehicles and appliances with tax breaks rather than the threat of tax penalties and we'd all be better off. - dshPls, on 06/11/2008, -2/+23Yeah or you don't want the taxes just passed on to the consumer...
- ftx437, on 06/11/2008, -3/+23Correct me if I am wrong....(prob get dugg down)
Yes oil companies are making "record" profits.
But isn't there profit margin still about the same? - david76, on 06/11/2008, -0/+20Here's the thing. If the government of Chile did this to an American company doing business there, we would be up in arms. It's like, you've played by the rules, and then at the last minute the government says "Yes, but you forgot to pay this OTHER tax we just made up."
It's pretty much *****.
The legislation seeks to impose a windfall tax, which is a crock. If you want to roll back the tax breaks which were specifically given to the oil industry a few years ago, great. But if you want to specifically impose a windfall tax, not so much.
You can't have stable, forward looking industry in a country which constantly changes the rules. - TRScheel, on 06/11/2008, -3/+22Thats crazy talk! Dont you know that a smart company would just eat the loss, learn a lesson, and lower their prices? Duh
/sarcasm - Lugano, on 06/11/2008, -2/+21Your logic has no place on digg!
Otherwise, good points. - wkeown, on 06/11/2008, -5/+24Punishing someone for making too much money isn't what I would call "American."
- pitlord, on 06/11/2008, -10/+29Not to mention, the author of this article totally misread the article from MartketWatch that he links to as a "source" to prove that the oil market is in "decline."
-_-
If you read the actual Market Watch article here:
http://www.marketwatch.com/news/story/oil-futures- ...
it becomes quite clear that what the author is calling a "decline" in demand is actually just slower than expected growth. This is what the author is calling a "decline" in oil demand, FTA:
"Early Tuesday, the International Energy Agency lowered its forecast for average global oil product demand in 2008 to 86.8 million barrels a day, down 80,000 barrels a day from its estimate last month."
o.o
So, you libtards are either totally ignorant or you are intentionally lying to people to turn them against Conservative policies.
-_-
Oh, but I thought liberals never did ANYTHING dishonest. I thought liberals were all about open and honest debate. The free intellectual exchange of ideas.
>.>
Guess not. - jimmyb3, on 06/11/2008, -5/+23I could not agree more. It was disgusting to see those rich Dem senators grill the oil company execs on how much they made per year. What hypocrisy. Made me want to vomit. Libs, please keep in mind that America is a capitalist society. I know many DigLibbers want to convert our country to a blend of socialism and nationalism, but that's not going to happen. The people who actually produce in this country and who pay 90% of the taxes will not let that happen. Myopic DigLibbers get me every time.
By the way, do you hear the DigLibbers screaming about the heavy taxes assessed on each gallon of gas? No, I didn't think so.
Gas prices are a problem, but pretending to solve it by capping the "windfall" profits of oil companies is not the answer. Ever since the cold war ended, it seems that the Libs aren't happy unless they have an "evil empire" to confront. Thus, they brand any major profitable corporation as "evil," and blog accordingly. They must be evil, because they are profitable. Or something like that.
It seems that a lot of DigLibbers are simply irate in general and are constantly searching for outlets to vent their anger. Oh well, that Net comes with the good and the Libs. That's why I love this country. Even low producing, minimal tax paying Libs are entitled to publicly trash those who keep this country's economy and infrastructure afloat. God Bless America. - FuzzyBunny, on 06/11/2008, -0/+18Or unless you know the first thing about economics.
- phydeaux70, on 06/11/2008, -6/+24The government makes more off of a gallon of gas than the oil companies do.
It's true....do some research. - badkins, on 06/11/2008, -4/+22It seems like the Dems are just trying to trick people into supporting them. They come up with these terrible ideas that have no chance of helping anyone, but sound great in the headlines. When the republicans do their job and vote down these terrible ideas, then the dems can get an article in the press that says "Republicans dont want to lower gas prices". This isnt the first time they have done exactly that.
- Braxo, on 06/11/2008, -1/+18Why should there be a tax on successful companies that do a lot of business?
Start this trend and companies in America won't want to grow and become too successful in fear they will fall into the 'Too Successful Tax Bracket' - dshPls, on 06/11/2008, -1/+18You are aware we're talking about the average Joe with a 401k here right? By slamming the oil companies now, the government is just going to stifle peoples retirement money.
- silentboom, on 06/11/2008, -6/+22The Republicans did the right thing here, why are Americans so politically and economically challenged? The oil companies have lower profit margins than some other industries....we don't have a right to add more taxes. And if we did they would just pass them back to the customers anyway. It also opens the door for the government to tax more profits elsewhere. Who gets hurt? The taxpayer once again. Why would someone support this? The price of oil is caused by the falling dollar, as it gets weaker and more countries dump it, and it becomes less tied to oil it will fall. The government will print more to pay debts because there is no other way. When they do that they intenionally devalue the currency and your salary becomes less in the real world. It buys less gas, it buys less milk, it buys less everything. You people look for simple solutions that fit the status quo and that is why Obama and McCain win these elections, it's disgusting. YOU PEOPLE ARE RESPONSIBLE!!! You let these corrupt politicians destroy our country and institute a police state because you don't understand anything. Don't vote for someone because they have a dick or *****, or are a black smooth talker......wake up before you doom us all. You may have done it already. Ron Paul told you the truth as he has always done, now we have to follow the Libertarian ticket, there is no other way. Honestly NO OTHER WAY.
- mrn111, on 06/11/2008, -5/+20OK, keep your windfall profits, but give me back the tax breaks these companies have been getting, allow the Justice Dept. to go after the members of OPEC who may be price fixing, and make those damn speculators but up more cash instead of just driving up the price of oil over every little thing. (All of these were also addressed in the legislation.)
- shifty2, on 06/11/2008, -7/+22i might get dugg down for this question, but i think it needs to be addressed by the collective knowledge of Digg users.
Why are gas prices so high?
From what I have researched on my own and read here (comments or submissions), the supply and demand rule is out the window. Supply is high, demand is moderate, so why the high prices?
I think this question needs to be addressed so that other people will know the truth and logic behind it. - moracity, on 06/11/2008, -4/+19Dude, "lower than expected" is not a decrease in demand.
This is the same tactic used by Democrats in Congress. They propose a budget that calls for 10 million dollars increase for project x. Republicans say "no", we'll do 8 million.
Headline in NY Times:
Republicans Cut Funding By 2 Million!!
Then all the ignorant sheep come out of their pens like little mindless robots chanting the same thing. - Julik, on 06/11/2008, -4/+19Oil profits are a much smaller percentage of what they make than most other businesses in the US. They just sell so much more that the small percent profit adds up. Magazines make 22% profit.. Oil makes 8%.
- inigomntoya, on 06/11/2008, -3/+17I would like to see a comparison of Google's profits vs. Exxon-Mobile's profits. I would be willing to bet that Google has a MUCH higher profit margin than ANY oil company out there. I don't have anything against Google. It is a great company run by great business people. But if this windfall taxes thing is ever passed, they would have to apply it to all companies in all industries and then "Big Oil" wouldn't seem like the rich bastards that everyone pins them to be.
- PDF84, on 06/11/2008, -11/+25Its called Capitalism, not Socialism/Communism!! which is was the Dems want.
Boo Hoo little Johnny life's not fair. Guess you will just have to work a little harder than others. - 3tcp, on 06/11/2008, -1/+15No, but I can say 'buying a commodity with global demand using a weak currency'.
- InvisibleInk, on 06/11/2008, -2/+15Does she have a new album out? I've been waiting for years.
- alpinecow, on 06/11/2008, -0/+13pitlord - that's not accurate. senatorial rules require 60 out of 100 senators to be in favor of ending debate and bringing the bill to a vote. since Dem's don't have a 60/40 majority in the senate, they need some Republicans to end the debate.
- 3tcp, on 06/11/2008, -1/+14Most of the savings of most of the people who aren't rich are tied up in the stock market. A money grab by the government of corporate profits doesn't benefit regular people. It isn't like the government is so responsible in their spending that a working class retiree will be better off because a tax that decreased their retirement fund also slightly decreased their relative tax burden.
- k1dN1c, on 06/11/2008, -3/+16this bill doesn't address the problem of rising gas prices!!
just another attempt at bigger government and more bureaucracy by people who want the gov't to hold all the $$ and power... socialism, here we come!! - inactive, on 06/11/2008, -1/+14That's not the purpose. The purpose is to "act" like they're doing something. It's straight out of the Politics 101 playbook.
- Julik, on 06/11/2008, -1/+14Oil companies make 8% profit... 8% is very very low. They make a lot of money for two reasons. One they bought up a bunch of oil when it was cheap.. and then they can sell it now and increase on that 8%. That is called Investing. The other reason is how much oil is used in the world... if you make 8% profit but sell a trillion dollars worth of product you will make more than someone who makes 100% profit but only sells a million dollars worth of product. But who is really ripping people off? The guy making 8% or 100%?
Also the government gets more per gallon of gas than the oil companies do already.. now they want more. - Julik, on 06/11/2008, -1/+13He has no idea what he is talking about.
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