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258 Comments
- wiggles, on 10/11/2007, -52/+225Businesses don't pay taxes. Their customers pay taxes.
Indirect taxation is one of the most underhanded political moves there is. When you tax a business, that business increases its expenses, which forces them to raise prices to compensate. They don't reduce their profits, they don't pay the CEO any less, and they don't reduce their dividends. Businesses would much rather avoid being screwed by the government by screwing their customers, especially when it comes to high barrier to entry industries like big oil.
When businesses get taxed, they simply pass the tax on to the consumer. This bill would have raised prices, by some estimates, to $6 per gallon by 2009. There is little difference between taxing the oil company and taxing gas at the pump.
This bill would have hurt a lot of low income people who need cheap gas (for both private and public transportation) to get to their jobs. Low income people can afford high fuel prices the least. I'm all for increasing funding for research into alternative energy sources, but this particular tax would have caused too much hardship to people who could ill afford it. - schnikies79, on 10/11/2007, -9/+49The last thing the Government needs is more money.
- spillingvoid, on 10/11/2007, -15/+53Yes what a wonderful idea lets raise taxes for the oil company's so that we have to pay high prices at the pump there for doing absolutely nothing to the oil company's bottom line but we as consumers lose a little more of our money and we also pad the pockets of the government brilliant. Perfect plan.
- digglusis, on 10/11/2007, -9/+40Call me back when you learn the difference between a profit and a profit margin.
- fixyourthinking, on 10/11/2007, -7/+32Just to note - Republicans are SUPPOSE to block ALL tax hikes. Does any one here honestly think that oil companies won't pass a tax hike along to the public?
- flamingmb, on 10/11/2007, -35/+55didnt you guys know that taxing corporations is un-american and that it means you hate freedom!
/sarcasm. - gjscds, on 10/11/2007, -9/+28Good. I want cheaper gas. Raising the cost for big oil isn't the way to reduce my gas costs.
The way to reduce my gas costs is to reduce their costs. And this can be done by allowing localized (American) drilling.
That is all. - faithhealer, on 10/11/2007, -17/+36@wiggles: Businesses may have to raise prices if their expenses go up, but they cannot fully recover the tax because prices are also subject to demand. Therefore, they can only recover part of the tax with higher prices, and their profits also suffer. The goal, however, should not be to lower the profits of the oil companies, but to align our tax policies with national strategic and economic goals.
- darksheer, on 10/11/2007, -10/+28Wiggles--thank you for adding your thoughts here before the unthinking masses chimed in with their "oil companies are getting fat wallets-we should tax them and take their money!" routine. I'm very glad that someone had the good sense to get this into the top comment.
- hilomania, on 10/11/2007, -6/+23Federal excise taxes per gallon are twice as high as Oil Companies profits. (Appx $0.20 vs. $0.10 per Gallon). Shouldn't we limit what our Govt charges? (Note: this does NOt include state taxes, sales tax etc...).
Also I Europe the 80% of gasoline cost is taxes. That's why a gallon costs about $7.50. Wanna go there?
Note: this also makes politicians talking about saving energy *****. Think anybody (except Ron Paul) is willing to cut of their own funding?
HiLoMania - darksheer, on 10/11/2007, -1/+17Your statement is correct--assuming highly elastic demand. As a product, gasoline has perhaps the most inelastic demand of any product that consumers use--so they absolutely can recover it all via taxes.
Even if they can't recover it all--the end result is the same: higher prices for the consumer. - AronT, on 10/11/2007, -6/+21I totally agree with this; raising taxes on the corporations will just mean higher prices at the pumps.
- aliengoods, on 10/11/2007, -2/+15I have a question related to business and the free market. How often has deregulation of a market which was previously regulated result in a lower cost for the consumer over the long term? And I'm not talking about the markets that deal in frivolous goods or services. I'm talking about the power and energy industries, telecommunications, essential goods and services, etc.
I'm asking because I really don't know, and it seems to me that every time an industry is deregulated, within a decade or so you have a monopoly or an oligopoly which erect barriers to entry against competition and raise their prices while getting tax breaks from the government.
The airline industry is the only one I can think of that may have reduced prices in the short term, but they also get billions in different subsidies from the government. Deregulating internet domain control has resulted in much lower prices, but that was because a single company was given a monopoly and kept the prices extremely high.
I guess the root of my question is does the free market inspire competition and lower costs for ESSENTIAL goods and services or does it tend toward a monopoly and higher costs? - flamingmb, on 10/11/2007, -6/+18yeah, who needs regulation. Businesses will always do the moral and right thing, especially when no know is watching.........
/sarcasm
don't kid your self, we need some regulation and control on the market. - pwrage, on 10/11/2007, -40/+52Let's just keep the Feds out of this business altogether. Remove the tax and regulatory burdens from both sides and let competition in the market decide who and what supplies our energy needs. Let the people vote with their wallets!
- inactive, on 10/11/2007, -9/+20thank you for not being your typical digg user and saying "tax the huge corporations, boo republicans!!" The first place the big corporations place their new expenses is on their customers. Many people seem to think that taxing corporations will give the government (and the people) part of their gold mine of profits, when really the executives won't get pay cuts, and the corporations will either raise their prices to maintain profits or cut jobs and wages from the thousands of peons they hire.
The last thing they'll do is harm their shareholders or executives. Aren't enough taxes paid by consumers and businesses? We shouldn't be raising ANY taxes, we should be cutting spending by getting out of Iraq and eliminating government pet projects and excess girth. - pintomp3, on 10/11/2007, -1/+11there is no need to raise their taxes, just stop giving them money and subsidies in energy bills. corporate welfare is a much bigger problem.
- AronT, on 10/11/2007, -3/+13I am by no means a republican; but I think this notion of the Government trying to control the free market is absolutely ridiculous. It didn't work for Stalin, it won't work for us.
- eth3l, on 10/11/2007, -11/+21And this is a bad thng? Why does everyone want to punish successful businesses? If you dont like thier practice, dont buy thier products, simple as that.
- gbovee, on 10/11/2007, -2/+11What is so wrong with oil companies making a profit? I'm guessing that most of you who are saving for retirement have investments in the oil industry. Three things typically happen when "windfall" taxes are imposed.
Jobs are cut
Prices are raised
Dividends are lowered - wiggles, on 10/11/2007, -1/+9I agree with you in principle, but in this case, we have an issue where a flaw in the market system is causing problems with both the environment and low income individuals. We need cheaper, cleaner energy that doesn't come from religious nutcases, and the best way to get it is to do more research into the possibilities. The government is the best way to provide massive amounts of funding for this kind of thing, because commercial entities are slow to come up with solutions at this point, because there's too much R&D investment required. The government has to get the money from somewhere to fund this kind of thing, but there's a right way to get that money and a wrong way. This tax was definitely the wrong way IMHO.
- Xevec, on 10/11/2007, -3/+11I love how most people talk about the oil industry. They say stuff similar to the idea that "we need more government involvement in oil..there is too little of it." Are you kidding me? Are you ignoring the amount of government there is ALREADY? Let the market itself decide whether or not to use alternative fuels or oil. Gas has many factors of getting expensive. Part of it is actually free market material. More countries are starting to use oil...so worldwide demand of oil is increasing. So it is OBVIOUS that gas prices will increase. Some people will point out that barrels of oil have been less than years before...but that alone does NOT determine gas price.
- timothybryce, on 10/11/2007, -5/+13Silly Democrats - complaining about high gas prices and then trying to increase taxes on gas.
- Aaronontheweb, on 10/11/2007, -5/+13Taxing Oil isn't going to help gas prices... Let us drill on the contiental shelf in the Gulf of Mexico or in ANWAR if you want lower prices.
- keyboardduder, on 10/11/2007, -8/+15No, wiggles, youre right. The businesses make the customer pay indefinitely. There is no way to win unless we dismantle all the government organizations that are supposed to be doing their job. I didnt see it eye-to-eye with ron paul's idea of dismantling government organizations but they have all become nothing but businesses, no longer government organizations. the USDA feeds billions into fast food, the EPA overlooks gas guzzling cars, the media and the news censor anything that would cover up this conspiracy, the oil companies and drug companies have hundreds of lobbyists that feed hundreds of thousands of dollars into congress' pockets. The whole system is corrupt. Of course they block tax hikes, the oil companies line their pockets with our "well-spent" money.
- pevensen, on 10/11/2007, -0/+7Did you read his full comment? He isn't saying that literally business do not pay taxes, they do. But that they pass the tax cost onto the consumer by raising prices, rather than lowering their profit margin and the salaries of their employees.
- darksheer, on 10/11/2007, -0/+7err...that is, they can recover it all via price hikes that cause the consumer to pay more.
- joelav22, on 10/11/2007, -5/+12Just because you bitches are all broke, don't penalize people that actually make money. Do big oil execs make a TON of cash? Yes. Should they? Yes. They picked a good career path and should thank their HS Guidance counselors. While the numbers are staggering, the GP most oil companies pull in are less than 5%.
Why aren't people trying to tax the crap out of Home Depot? They posted 11% GP - more than twice that of any oil company. An no matter what anyone *thinks*, the fact is consumers pay tax hikes imposed on big businesses. It does not come out of the CEO's salary or GP. It's the sole of the free market economy. If you want to complain about gas prices, complain about the federal and state government taxing consumers directly for a product they have no hand in acquiring, manufacturing, or supplying. About a 1.40 per gallon of gas is tax that YOU pay - not the oil company (until they fill-up) - inactive, on 10/11/2007, -6/+13Inaccurate title it was not just Republicans blocking it.
- darksheer, on 10/11/2007, -0/+7Too bad that the same people who think the Republicans are evil for blocking this tax also think it would be evil for us to drill for oil in many places in the U.S. where it exists but we are currently barred from getting it.
- egroeggnik, on 10/11/2007, -0/+6It's not just drilling. It's also the manufacturing capabilities of this country. The US oil companies are refining crude oil into gasoline (and other things) on systems that are as much as 30 years old, and quite inefficient. How about letting an oil company build a refinery that's technically up to date?
- theduck71, on 10/11/2007, -3/+9What part are you missing?? THE COMPANIES DO NOT PAY THE TAX, THEY PASS IT ALONG TO THE CONSUMER!!! I, for one, am sick and tired of shelling out two hundred bucks a month for gas,(When ten years agao I was paying maybe $25) I do not want to shell out $250 a month so the government can waste it on illegal immigrants, another war that was not thought all the way through, some other stupid thing that they do with the money that we are forced to give them!!
- typo180, on 10/11/2007, -1/+7Higher gas prices will trigger a change in consumer activity if there are options available. It might actually lower demand for oil in the long run.
- eth3l, on 10/11/2007, -0/+5Hybrids. Bicycles. your feet.
People do not want their lives latered or inconvenienced, then they want to bitch about the conveniences they rely on. - JQP123, on 10/11/2007, -2/+7Actually, it mostly just means that you're gullible, naive and easily manipulated by clever politicians. Taxes? Corporations don't care about no steekin' taxes. They just pass the cost on to the consumer. If they can't, they re-locate.
- Ibanezfoo, on 10/11/2007, -5/+10Good! Gas prices are too expensive already. You tax the gas companies they will just pass the cost onto the consumer. Get away from these socialist principals people! This is America!
- darksheer, on 10/11/2007, -0/+5Regulated industries tend to be regulated because they they are natural monopolies (think electric companies or natural gas providers). I can choose my natural gas provider here in GA; but at the end of the day, the same gas lines connect me to the rest of the world--the gas is the same no matter who I pay for it. In this case, deregulation doesn't make sense because it introduces artificial competition. Artificial competition works differently than natural competition so the two really can't be compared.
- jcounterman, on 10/11/2007, -1/+6We're too busy trying to deal with this new ***** comments system...
- 0xbaadf00d, on 10/11/2007, -3/+8Good job Republicans!!
Realize that the oil companies make 8 cents per gallon of gas, while your state government makes between 30 and 60 cents per gallon. - voisine, on 10/11/2007, -0/+5Haha... that's great. I love it. The subtlety of your sarcasm though might be a bit much for the average 15 year old digger. Just in case people didn't catch it, lets extend that idea a bit. Why not raise taxes to 100%, then give everyone vouchers for their weekly ration of fuel, food, housing, etc... Then no economic resources will be wasted on anything that the people we elect don't find worth while. No more drugs, gambling, porn, subversive music, reality tv, fast food, video games, hell, no more digg (too many ron paul stories subverting the minds of the citizenry). What a waste of productive ability that could be better spend educating people about the greatness of socialism!
- Wormfather, on 10/11/2007, -4/+9Digg-Nation, I'm so proud of you for not looking at the $111 Billion profit number and saying "Yeah, tax em to hell". Most of those profits go back into the company because they always have to be on the look out for new sources. When all the oil is used up, or the shift is made to new fuel sources, it will be the oil companies who will have to shift and find ways of providing the new service.
Furthermore...if you're going to tax a sector of business because they are doing well...well, you're going to have to subsidize them when they're doing poorly. - qazz, on 10/11/2007, -3/+8This is an undue burden on consumers, share holders, and employee. Mostly consumers.
- happytron, on 10/11/2007, -0/+5I thought refinery capacity was a bigger problem than crude supply with regards to gasoline prices in this country.
- iceperson, on 10/11/2007, -0/+5Yeah. Price caps on fuel worked soooo well in the 70s /sarcasm
- Cowchip7, on 10/11/2007, -0/+5Goverment sticking its nose into the oil business necessarily produces higher prices. For example, the goverment wants to increase the minimum fuel efficiency requirement. Unfortunately, as demand for oil falls, so does the incentive for oil companies to build more refineries. Lack of refineries within the US is a major reason for the soaring price of gas. I can't wait until we find some new energy source that doesn't come from the middle east... I'll pay 4 bucks a gallon for that!
- inactive, on 10/11/2007, -4/+8I have to laugh at the junior economists repeating the mantra "businesses don't pay taxes." If you've ever owned a business, you know just how false that assumption is.
- CraigJ, on 10/11/2007, -0/+4While your statement is indeed true, the fact is that even though corporations do pay the majority of the taxes, they also pass that expense to the consumer because shareholders won't stand for a reduction in profits, and taxes eat those profits. The government, and specifically the left, apparently do not understand this simple fact: The corporations have the means to pass the taxes on to the people who buy their products. Your tax increases are hitting the consumer the hardest. This is basic economics. I swear, have the idiots in congress ever tried to balance their own checkbooks? Because from the way they behave you'd think not...
- mtekk, on 10/11/2007, -0/+4Did you miss economics 101? There is no way in hell anyone would absorb the cost of a tax (well any cost for that matter) if they didn't have to.
Example: If you work on someone's computer, you don't just purchase the needed parts for them and then absorb the cost of those parts, you charge for parts+labor. That's how business works. - egroeggnik, on 10/11/2007, -0/+4It's not that they DON'T update the equipment, it's that they're not allowed to do so. Demand is at a point where they can't shut down to upgrade, and they're not allowed to build a new one that would be more efficient.
- tnvwboy, on 10/11/2007, -0/+4If there were viable commercial alternatives I'm sure more people would. Vegetable Oil, hydrogen fuel cells, and electric cars are still way to early in the market and are not commercially viable yet. So what else do we have but petroleum based fuels? Too many of us, hell the whole economy, NEEDS oil. It sucks but they have us by the balls.
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