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WASHINGTON (AP) - The House approved $18 billion in new taxes on the largest oil companies Wednesday as Democrats cited record oil prices and rising gasoline costs in a time of economic troubles.
The money collected over 10 years would provide tax breaks for wind, solar and other alternative energy sources and for energy conservation. The legislation, approved 236-182, would cost the five largest oil companies an average of $1.8 billion a year over that period, according an analysis by the House Ways and Means Committee. Those companies earned $123 billion last year.
Unfortunately the extra costs the oil companies will pay will just be passed on to the consumer.
I thought the free market system was supposed to lead to the lowest possible prices. Do you think there is price fixing (collusion) going on? It also seems to me that the oil companies have had favorable tax treatment under Bush, an oilman, and this led to their enormous profits. Am I missing something here?
I thought the free market system was supposed to lead to the lowest possible prices. Do you think there is price fixing (collusion) going on? It also seems to me that the oil companies have had favorable tax treatment under Bush, an oilman, and this led to their enormous profits. Am I missing something here?
The free market does bring the lowest possible prices. Problem is that a central bank operates as a State entity with a monopoly on the money and sees fit to print whenever it wants to.
Oil is the same price with respect to real money (gold), so there is no price increase even through we've probably peaked in production last year. You are instead a citizen of country with the biggest tax and spend liberal in WH history. Yes, taxes have gone up for you. Inflation is a tax and paid for by everyone who holds US dollars, not just wage earners.
Last edited by ViewFromThePeak; 02-28-2008 at 10:28 AM..
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Quote:
Originally Posted by litlux
I thought the free market system was supposed to lead to the lowest possible prices. Do you think there is price fixing (collusion) going on? It also seems to me that the oil companies have had favorable tax treatment under Bush, an oilman, and this led to their enormous profits. Am I missing something here?
Of course I believe that there is collusion going on. I also believe that because gasoline is such a daily necessity that if there weren't, oil companies still wouldn't engage in a price war because it doesn't benefit any of them. Don't you find it ironic that although oil companies have had this favorable tax treatment the prices of gasoline have still steadily risen, even a year or two ago when inflation was not a huge concern (at least not on the surface)?
The first rule of business is to protect the bottom line. The most efficient and effective way to do that is to pass any higher costs on to the consumer. It's the basics of business, whether you are a multi-national conglomerate or a small family owned business.
I think the actual profit per gallon of gasoline breaks down to like 5-6 cents. It's just that we purchase such an enormous amount of gasoline in the US that all of those little 5 and 6 cents add up.
Why is nobody complaining about the amount Uncle Sam makes PER gallon of gas?
Unfortunately the extra costs the oil companies will pay will just be passed on to the consumer.
Businesses do not really pay taxes as individuals do. A business may do several things to keep the shareholders happy if the return is not what is expected. They can cut expenses, they can sell assets, or they can raise prices. Hopefully cost cutting can make up the difference. But they can raise prices as long as the marketplace can absorb the added costs.
Individual taxpayers can also cut costs. However, it is a different story in their ability to raise revenue (their wages).
In this case, the legislation is doing social engineering. It moves money from a money making going concern to encourage research in different forms of energy which they support.
That is not good or bad in itself. But please understand that it is what is going on.
Everybody complains about big oil, like Exxon-Mobil. There profit magin is around 10% where as Altria who makes Marolboro Ciggarettes has a profit margin of 23%. Merck the drug maker has a profit magin of 25%. Higher taxes on oil companies will not help anyone. They will have less money for research and devolopment, meaning longer time span for alternative energy. Our government and states put a lot of taxes on our gas. And believe me these high fuel prices affect me. I am in the trucking industry. One of my drivers called me last night and said he spent $1085.00 fueling up.
They will have less money for research and devolopment, meaning longer time span for alternative energy.
How do you figure that? Alternative energy sources should be researched by people without a vested interest in keeping the current system going as long as possible. That means the oil companies are out. If you were pinning your hopes on alternative energy sources on the oil companies that is sad.
Oil companies have had obscene tax breaks for a while now. This is barely a drop in the bucket. The amount of tax breaks we give them is one of the reasons that our gas is so cheap. Gas should be more expensive. It's price is being artificially reduced because of massive government subsidies. I hope the government raises their taxes through the roof. Maybe if gas cost $10 a gallon people would really look at how much driving they do and change their lifestyle.
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Business Taxes?
