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Windfall Profits Tax
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| Shakka |
Just curious what you guys think of this wonderfully anti-capitalistic, success-punitive ideas that are currently being tossed around. In the proper context of course.
Probably doesn't surprise anybody that I'm whole heartedly against it. Extra government involvement is never a good thing, generally speaking. |
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| Groundhog Boy |
I'm not in favor of it normally, but don't you think that the oil companies profits were a bit inflated this quarter. I mean, in effect, consumers were being lied to about the availability of oil, which drove the prices up and the oil companies reaped the benefits. These profits show that there was no reason for the prices to be that high, but they were driven up based on misinformation. In no other industry have prices increased at the rate gasoline has in the past year or so.
In this day and age, oil isn't a want, but a need. This country would go to econically if people can't afford transportation. If people can't afford gas to go to work, why go? For instance, my dad drives over 60 miles each way to work. Anymore, that's almost $15 daily for gas. If you make under $10 an hour, why would you travel that far, thus hurting the overall economy?
Additionally, by inflating prices, these companies are taking money that would have helped to stimulate economic growth across the board, as many poorer families were forced to cut back on other expenses in order to pay for gas. |
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| Shakka |
| quote: | Originally posted by Groundhog Boy
I'm not in favor of it normally, but don't you think that the oil companies profits were a bit inflated this quarter. I mean, in effect, consumers were being lied to about the availability of oil, which drove the prices up and the oil companies reaped the benefits. These profits show that there was no reason for the prices to be that high, but they were driven up based on misinformation. In no other industry have prices increased at the rate gasoline has in the past year or so. |
If there is clear evidence that shows that oil companies were complicit in manipulating the price of oil in order to bolster their own profits, then I would be pretty pissed off. However, it is a cyclical industry like all others. There will be good times and there will be bad. If you have the government arbitrarily come in and effectively say, "Hey, you made too much money, therefore we're just going to take it away from you...", where does it end? Do you go after Google or Microsoft for being too good at what they do? Do you go after the homebuilding industry because they were in the sweet spot and were making too much money? It's not the government's wealth to decide to strong-arm away with the use of force. It looks to me like political posturing by corrupt politicians on both sides of the aisle.
Plus, you say profits were inflated this quarter. ONE QUARTER. Holy , somebody call the cops. One quarter amounts to a blip on the radar. If it was a sustained problem, it might become more of an issue.
Additionally, the vast majority of those "windfall profits" will be 1)paid to shareholders (like you and me, assuming you manage your money) in the form of dividends, and 2)reinvested in the business to find more oil or find more efficient ways to process it in the form of R&D. It's not like the CEO of Exxon just gets to pocket $6 billion because he had a good quarter. The shareholders would never stand for it. If you take away the money that can be reinvested in the business, you make doing future business all the more difficult.
| quote: | | In this day and age, oil isn't a want, but a need. This country would go to econically if people can't afford transportation. If people can't afford gas to go to work, why go? For instance, my dad drives over 60 miles each way to work. Anymore, that's almost $15 daily for gas. If you make under $10 an hour, why would you travel that far, thus hurting the overall economy? |
Exactly why it's cyclical. Let the free market work. IF prices get too high, people will seek alternative sources of power. Their consumption patterns will adapt. Demand will ultimately fall and oil companies will be left holding the short end of the stick, so to speak. This isn't the first time this has happened.
| quote: | | Additionally, by inflating prices, these companies are taking money that would have helped to stimulate economic growth across the board, as many poorer families were forced to cut back on other expenses in order to pay for gas. |
Again, if someone can provide clear and indisputable evidence that the oil companies were complicit in driving prices through the roof, then there should be some sort of consequence for their actions. However, just making a blanket statement that they were in the right place in the right time, made too much money (who's opinion are we talking about, anyway? Who gets to decide how much is too much?) and therefore must be punished....well, it makes me sick. Tomorrow they'll be knocking on your front door demanding you pony up more because their database shows that you were too successful this year. Who is responsible for inflating the prices? If anyone, you can probably point the finger at hedge funds and speculative investors in the marketplace. Should the government then go after the funds that made the most money for their clients and demand a portion of their gains? Who exactly is being helped by a windfall profit tax? The government, that's who.
Yeah, it's tough to sit back and see some companies making money off of what hits the everyone's wallet, but it is capitalism. Embrace it or reap what you sow. Today it could be oil, who knows who could be the next target? |
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| Groundhog Boy |
| quote: | Originally posted by Shakka
If there is clear evidence that shows that oil companies were complicit in manipulating the price of oil in order to bolster their own profits, then I would be pretty pissed off. However, it is a cyclical industry like all others. There will be good times and there will be bad. If you have the government arbitrarily come in and effectively say, "Hey, you made too much money, therefore we're just going to take it away from you...", where does it end? Do you go after Google or Microsoft for being too good at what they do? Do you go after the homebuilding industry because they were in the sweet spot and were making too much money? It's not the government's wealth to decide to strong-arm away with the use of force. It looks to me like political posturing by corrupt politicians on both sides of the aisle.
Exactly why it's cyclical. Let the free market work. IF prices get too high, people will seek alternative sources of power. Their consumption patterns will adapt. Demand will ultimately fall and oil companies will be left holding the short end of the stick, so to speak. This isn't the first time this has happened.
Again, if someone can provide clear and indisputable evidence that the oil companies were complicit in driving prices through the roof, then there should be some sort of consequence for their actions. However, just making a blanket statement that they were in the right place in the right time, made too much money (who's opinion are we talking about, anyway? Who gets to decide how much is too much?) and therefore must be punished....well, it makes me sick. Tomorrow they'll be knocking on your front door demanding you pony up more because their database shows that you were too successful this year. Who is responsible for inflating the prices? If anyone, you can probably point the finger at hedge funds and speculative investors in the marketplace. Should the government then go after the funds that made the most money for their clients and demand a portion of their gains? Who exactly is being helped by a windfall profit tax? The government, that's who.
Yeah, it's tough to sit back and see some companies making money off of what hits the everyone's wallet, but it is capitalism. Embrace it or reap what you sow. Today it could be oil, who knows who could be the next target? |
If it were a cyclical industry, this past year should have made profits lower, not higher, what with all the natural disaster issues, Iraq war, etc. Can you imagine if the water, food, other necessities increased in price at the same rate oil did following Katrina? As a comparison to something that I've personally experienced, during the NYC Blackout last year, all of the stores weren't suddenly charging $5-10 for a gallon of water. Candles and flashlights didn't double in price. It was still the same price as normal. There's something wrong with gaining this much from everyone else's misfortunes. You stated Google and Microsoft as others that the government could go after for making too much. The problem is, computers aren't the sort of necessity that transportation and heating are.
Personally, I think the major reason that they're even threatening is to keep prices manageable over the winter. If old people start dying because they're keeping the heat in their homes down so much because they can't afford it, there's going to be some public backlash towards the government for not doing anything about the price gouging.
Like I said, usually I'd be with you on this one, but I don't really see how profits could be this high without manipulating the price of oil to bolster profits in time of the country's need. |
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| Shakka |
Every industry is cyclical. Every time man has proclaimed that he beat some form of the business cycle, it's come back to bite him in the ass. Scarcity/fear causes price to go up. Just because they're selling their product at the prevailing market rate doesn't mean they're doing something illegal. It's a slippery slope these politicians are treading on. Unless the profits were made illegally, it just smacks of envy.
EDIT: Ever heard of a Fairness Doctrine? Pure Evil. |
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| MisterOpus1 |
Normallly I'd be pretty against it actually, but something just smells fishy about their incredibly huge profits.
And this should definitely raise an eyebrow:
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CEOs from the nation's biggest oil companies sparred with lawmakers Wednesday at a Senate hearing into this year's jump in oil prices and record industry profits.
The contentious hearing comes as consumers face a jump of 50 percent or more in home heating bills this winter and gasoline prices have surged 20 percent this year.
It also came after some Democrats slammed Republicans recently for pushing through more federal subsidies for oil companies rather than trying to help consumers cope with the rise in energy prices. (Full story)
Even before the remarks got started, Democrats and Republicans were at each other over whether energy executives should have to swear to tell the truth before the panel.
Senate Commerce Chairman Ted Stevens rejected calls by some Democrats to have the executives sworn in, saying the law already required them to tell the truth.
http://money.cnn.com/2005/11/09/new...earing/?cnn=yes
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And this matters because:
| quote: | | The industry's third-quarter profits jumped 62 percent to about $25.9 billion as Exxon Mobil, the nation's biggest oil company, posted the largest corporate profit in history in the quarter. Oil company's stocks are up some 40 percent from a year ago, giving big gains to shareholders. |
Now I love a good profit as much as the next guy, but at what expense is that profit being created? The timing of it just doesn't quite feel right, and for them to avoid being sworn under oath by the Republican Chairmen Stevens should give us a bit of pause on the matter.
Now I realize that there are a number of Dems. on the oil payrolls too, so don't think I want to be easy on them. Nevertheless, I think it goes without saying that the vast majority of $ is geared towards Republicans, and I do think a legitimate concern pertaining to THIS ONE EXCLUSIVE issue only is necessary.
(note my emphasis on this one issue only at that particular time of gas spikes. This should not be a mandate for other issues - that should only be on a case by case basis). |
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| Fir3start3r |
| quote: | Originally posted by Shakka
If there is clear evidence that shows that oil companies were complicit in manipulating the price of oil in order to bolster their own profits, then I would be pretty pissed off. However, it is a cyclical industry like all others. There will be good times and there will be bad. If you have the government arbitrarily come in and effectively say, "Hey, you made too much money, therefore we're just going to take it away from you...", where does it end? Do you go after Google or Microsoft for being too good at what they do? Do you go after the homebuilding industry because they were in the sweet spot and were making too much money? It's not the government's wealth to decide to strong-arm away with the use of force. It looks to me like political posturing by corrupt politicians on both sides of the aisle. |
Reminds me of the cows and politics joke.
I'll italic the one I was thinking of, but I'll post them all since they're all pretty good. :p
Cows & Politics Explained
A CHRISTIAN DEMOCRAT: You have two cows. You keep one and give one to your neighbor.
A SOCIALIST: You have two cows. The government takes one and gives it to your neighbor.
AN AMERICAN REPUBLICAN: You have two cows. Your neighbor has none. So what?
AN AMERICAN DEMOCRAT: You have two cows. Your neighbor has none. You feel guilty for being successful. You vote people into office who tax your cows, forcing you to sell one to raise money to pay the tax. The people you voted for then take the tax money and buy a cow and give it to your neighbor. You feel righteous.
A COMMUNIST: You have two cows. The government seizes both and provides you with milk.
A FASCIST: You have two cows. The government seizes both and sells you the milk. You join the underground and start a campaign of sabotage.
DEMOCRACY, AMERICAN STYLE: You have two cows. The government taxes you to the point you have to sell both to support a man in a foreign country who has only one cow, which was a gift from your government.
CAPITALISM, AMERICAN STYLE: You have two cows. You sell one, buy a bull, and build a herd of cows.
BUREAUCRACY, AMERICAN STYLE: You have two cows. The government takes them both, shoots one, milks the other, pays you for the milk, then pours the milk down the drain.
AN AMERICAN CORPORATION: You have two cows. You sell one, and force the other to produce the milk of four cows. You are surprised when the cow drops dead.
A FRENCH CORPORATION: You have two cows. You go on strike because you want three cows.
A JAPANESE CORPORATION: You have two cows. You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk. You then create clever cow cartoon images called Cowkimon and market them World-Wide.
A GERMAN CORPORATION: You have two cows. You reengineer them so they live for 100 years, eat once a month, and milk themselves.
A BRITISH CORPORATION: You have two cows. They are mad. They die. Pass the shepherd's pie, please.
AN ITALIAN CORPORATION: You have two cows, but you don't know where they are. You break for lunch.
A RUSSIAN CORPORATION: You have two cows. You count them and learn you have five cows. You count them again and learn you have 42 cows. You count them again and learn you have 12 cows. You stop counting cows and open another bottle of vodka.
A SWISS CORPORATION: You have 5000 cows, none of which belong to you. You charge others for storing them.
A BRAZILIAN CORPORATION: You have two cows. You enter into a partnership with an American corporation. Soon you have 1000 cows and the American corporation declares bankruptcy.
AN INDIAN CORPORATION: You have two cows. You worship both of them.
A CHINESE CORPORATION: You have two cows. You have 300 people milking them. You claim full employment, high bovine productivity, and arrest the newsman who reported on them.
AN ISRAELI CORPORATION: There are these two Jewish cows, right? They open a milk factory, an ice cream store, and then sell the movie rights. They send their calves to Harvard to become doctors. So, who needs people?
AN ARKANSAS CORPORATION: You have two cows. That one on the left is kinda cute. |
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| Shakka |
| quote: | Originally posted by MisterOpus1
Now I love a good profit as much as the next guy, but at what expense is that profit being created? The timing of it just doesn't quite feel right, and for them to avoid being sworn under oath by the Republican Chairmen Stevens should give us a bit of pause on the matter. |
I'm not sure I follow why you are questioning the timing of their profits being up. China has been industrializing for several years now which has only added to global oil demand and helped to push up prices. The hurricanes that ravaged the gulf decimated the energy infrastructure of the U.S. in the gulf and crippled refining capacity. Until I see that someone made these gains illegally, I can't understand taxing an extraordinary quarter just because some politician deems that they've simply been too successful. And even then, what do you want to happen? Tax their profits and maybe squeeze a few billion dollars out for more government pork? It's not like the government is going to turn around and write all U.S. citizens a $10 check (as if that would really make anybody feel better about high energy prices). It doesn't do anything to resolve anything other than to ensure a lower revenue base going forward. Grassley made me sick today listening to his cries for this windfall tax. I quote (paraphrasing) him saying "All we're asking for is a donation..." (essentially something to that effect).
Is it a donation if you're forcing someone to hand it over? Goverment is the only organization with a monopoly on the use of force. Be careful what you wish for.
And to Groundhog in a prior post--who says that computers and software aren't necessities these days? Maybe 20 years ago, but I think there's a pretty strong case against that in today's digital world.
Now--I live in Atlanta and I explicitly remember after Hurricane Katrina that there was a particular gas station on TV shown selling gas for upwards of $6/gallon. Sonny Purdue was quick to go after anyone for price gouging. However, if you read more into the story, you would've also noted that the particular gas station in question was a BP, and their refining operations in the Gulf of Mexico were hit particularly hard. The gas station across the street was selling gas (provided they actually had any) for far less. The reason? The reason was that BP was actually trying to discourage the purchase of their fuel because it was in such short supply. Why didn't they just shut down the gas station in question until things improved? Because gas stations don't make that much money selling gas. They make the bulk of their profit margins selling things like hot-dogs, beer and potato chips inside the stores. If they closed the station, they would've stood to lose far less in the ways of no front-end business. Was it the right thing to do? I don't know. Is it right to punish oil companies for gains that were not ill gotten? IMHO, absolutely not. |
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| ::TranceVanDyk:: |
| quote: | Originally posted by Fir3start3r
Reminds me of the cows and politics joke.
I'll italic the one I was thinking of, but I'll post them all since they're all pretty good. :p
Cows & Politics Explained
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genious |
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| Yoepus |
this is ridicilious, its so stupid people buy into this its amazing.
Look at how much Exxon and other oil and gas companies made in revenues (sales), now look at how much they made in profits. Profits are less than 10% and have historically been like that.
You want to get someone for gauging go after the tech sector and stocks like microsoft:rolleyes:
so so stupid... its like trying to listen to the wisdom of the mob:mad: |
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| Shakka |
| So when are they gonna go after Oprah for a windfall profit tax?:conf: |
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| Fir3start3r |
| quote: | Originally posted by Shakka
So when are they gonna go after Oprah for a windfall profit tax?:conf: |
That should pay for a few hundred thousand homeless people eh?
Damn her and her capitalistic ways! Those that sit on their ass should get a share too! :whip: /sarcasm |
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