The prices keep going up and up and up...
Should oil companies be subject to a "windfall profits" tax?
Exxon Mobil announced its first-quarter profit last week -- $10.9 billion, up 17 percent from a year ago and very nearly a record for the company. This at a time when consumers are feeling the pain of record-high prices at gasoline pump.
Barack Obama has proposed reviving an old idea from the last energy crisis: A "windfall profits" tax on any oil company deemed to have overlarge profits. And he's backed by Sen. Charles Schumer, who had this reaction to the Exxon profits: "Once again, consumers' pain is Exxon's gain. Oil companies are racking up obscene profits left and right while American families are stretched to the limit by skyrocketing gas prices. It's high time for Big Oil to pay its fair share."
Is a "windfall profits" tax the right idea? Or will it create other problems?
Thoughts
Operatation Freedom from oil
Submitted on May 5th, 2008 by PabloSimply give a 3 year no tax break for alternative fuel technologies that are applied to the consumer market.
Not for development of Alternative fuels because honestly the Oil companies have burried many good and useful technologies in R&D for 50 years or more like Hydrogen.
The largest holders of Patents of Alternative fuels is Oil Companies. In fact, Oil Companies own roughly 84% of All alternative patents in the US for alternative fuels.
The best way to see all those neat alternative fuels that are on the road and have been on the road for decades but have not made it over into the consumer side is to give a tax break to those companies which apply alternative fuels into the market like Hydrogen thus they have no tax against those items.
In this fashion, the Market would race like mad to put some 15,000 plus patents into play that have been around for decades because it would be crazy not to take advantage of the no tax issue.
In the end, America would be converted to alternative fuels and be 15 years ahead of the game toward independence of foreign oil.
Once America is free of Foreign oil, then price of Oil can be regulated and Oil companies no longer can claim demand drives up price because there is no other driver like China and India to bid against and to push up price.
America's has to bite the bullet and make the jump to better forms of fuel that is ready and proven and already has hit certain parts of the consumer market in limited numbers.
The current limitor to America going Alternative fuels is the Oil Companies who is addicted to making money and has known for decades that eventually the price of oil would climb to a point that it would be too expensive for people to buy gas.
When I was an intern with Texico and an undergrad in college they had meetings about how to push up demand and how to extend the higher prices to maximize profits through several means. This was in the 1980s when the price of oil was $12 a barrel.
They knew then that it was just a matter of time.
So make zero taxes for Hydrogen or other alternative fuels for 3 to 5 years and bingo, America is free of foreign oil.
Oil is worthless until ---
Submitted on May 4th, 2008 by AnonymousOil is worthless until it is refined into a product that can be sold. That product is primarily liquid fuel, but there are a myriad of others that are also critical to modern society. Since Standard Oil was broken up by anti trust suits the left has done it's bidding to eliminate competition in the market.
With myriad and conflicting EPA regulations and public opinion running against the building of any new refinery in the last 30 years, the industry has simply manipulated supply to maximize profits where it once had to increase production or efficiency. Manipulating supply is much less costly than production or efficiency increases. What other industry can one name that has been profitable while maintaining an obsolete technology and infrastructure for 30 years in the face of the biggest socio-technical revolution to hit the planet?
The answer is not in taxation. It is in encouraging and supporting competition in an industry that has managed to destroy it's competition. This may mean relaxing regulations or providing seed money for start ups. We can also offer the energy companies tax credits for R&D in alternatives and systems improvements. This would, of course, immediately follow the removal of the "automatic" credits that they now get for doing nothing.
form over function
Submitted on May 4th, 2008 by chief28.retOur legislative branch can squawk, debate, propose, and resolve. But when it comes right down to it, parochial congressional politics is to blame, not oil companies.
those 'windfall' profits taxes
Submitted on May 4th, 2008 by John 2000The tax benefit already provided to multiple levels of government via product usage taxes far outstrip the corporate profits already, without what is being referred to as windfall profits. Indeed, the profits are temporarily record-breaking. Government every day sets new record levels of government waste even as it's job growth sector is by far the fastest growing in this in this 'recession' economy. Go fig.
They tried this 'windfall' crap back in the eighties and the cost of gasoline to consumers spiked. It is a bad idea. Just as the summer gas tax removal is a bad idea.
I suggest Congress give America a break and take an extended vacation starting now.