I forget whether you live in the US or not Andre.
If not you may have read that gas prices have gone down dramatically since the banking crisis came to a head. Prices where I live are down almost by half. Unless I am mistaken in thinking this effects, or is an effect of, how the oil companies are doing I can easily see politicians being less inclined to demonize them. They have the banking and loan people to go after now anyway.
In fact that price of crude is less than a third of the peak value reached in July.
I actually remembered how much crude had dropped when I left work and they were talking about it on the radio. Apparently they speculate that if economic difficulties hit china aswell it may drop to about $25 a barrel.
I expect a rise in the price of oil, not a continued fall. If the softness in the economy spreads, though, the prices could stay low for years to come; if it stays largely in the US and Europe, prices should return somewhat.
While I oppose 'windfall' taxes, I think that the US gasoline tax is far too low -- there are major externalities of burning gasoline that are not taken into account in current prices.
The wind fall profits tax has fallen on its own petard.
What would they do now that prices have delivered them a windfall profit loss? Give them a windfall credit?
Realistically the tax would have done little and was never a good idea to begin with. If prices are low, where are the incentives to be developing the more expensive offshore reserves or to find reserves that are even deeper and more expensive to develop? And how would they tax the companies anyway? Retroactively? And how would they treat Exxon differently from companies like Royal Dutch that are not domestically located? If they did, watch how fast Exxon would move its headquarters to Bermuda, or some other foreign haven that would be more than happy to have them relocate.
I'm sure Obama is perfectly happy have it forgotten all together.
Looking at the graph, by mid Feb they will be paying us to fill our tanks!
What a graph!
I'm loving it. I almost forgot about a time when I paid less than two dollars a gallon to put gas in my car... and at least the Fed can't get their grubby mits on more money that they don't deserve. Not to mention it'll shut the masses suffering from chronic wealth envy up for a little while.
The windfall tax wouldn't have done anything. I mean, what's stopping them from further raising gas prices to compensate for it? Less people will buy gas? Not likely.
I think it's a good thing he isn't going to bother with it, since it's just a waste of time. I don't know how you'd make oil companies not get the profit they want, though. Maybe the system is just broken?
WarPhalange: That's exactly what they would do. All corporate taxes are imbedded in the prices of the products you pay for when you buy them. There's no such thing... and this is one of the biggest flaws in liberal economics.
Why would anyone want to stop the oil companies from making money? It's not as if they're all ripping us off. Congress points the finger at "corporate fat cats" (free market industrialists making the capitalist system work for everybody) so that the wrath of the people isn't turned upon them. They've got a cushy, high paying, do nothing job and they want to hold on to them. What people need to understand is that these companies may be pulling record profits... but their costs also go up with the crude that they need to buy so it can be refined. Their profit margins remain the same, the only difference is the final dollar amount which is inflated due to supply and demand issues.
And the system has been broken since the conception of the Federal Reserve and government regulations imposed upon the free market following the Great Depression. No one can give a single definite reason for why that happened even today... Also, the United States has been out of money since the seventies. That's why we dropped the gold standard... another BRILLIANT move. This is nothing more than history finally catching up with us.
Because then you have a huge amount of money in the hands of a few people. Sure these people do things with the money, like invest it, but they also just store a lot of that money. At the same time there are people that are starving.
Someone is getting more money than they deserve. There was no oil shortage or bigger difficulty in getting it here when the prices spiked as far as I know. That means someone got something for nothing. Is it their right to try and do that? Maybe (cheating people out of their money is illegal as far as I know). But the consumer didn't get a say in it at all, since this was all across the board. There was no other competition to go to that had lower prices.
Oh I love this point, especially since I just tore down your free market fetish. Why should the wrath of the people be turned on Congress? What did Congress do? Spent the money unwisely? Maybe. But people are clearly clamoring for more of what Congress did, not less. So maybe the people don't want a free market?
The CEO's of oil companies? Because right now Congress people make about $170k/year. That's not what I would consider "high paying", although I agree that they should do more. Hell, maybe if they got paid more they'd care more? Isn't that how the free market works? You'd get more qualified people in because they'd be attracted to the money?
Like I said before, someone made a lot of money on this because there was no real reason for the prices of gas surging like that.
Exactly. That makes a whole lot of difference. Would you rather have 5% of your salary of $500/week taken away or 5% of your $5000/week salary taken away? It's still the same percentage, but $25 for the $500 salary is the difference between having a meal and not having it one day, whereas $250 for the $5000/week guy is chump change because everything still costs the same amount. That's why a flat tax is a ridiculous idea. And likewise here, they made a lot more money while prices for everything else basically stayed the same.
Maybe these starving people should get a job? It isn't hard to get a job in this country and I don't care who you are. If you need to move, you need to move... There are a plethora of options which can save ANYONE from starvation. And just because they have the money means they should give it to someone else? The government should steal it out from under them and give it to someone who may or may not be less deserving?
Talk to OPEC about that one. We get the majority of our oil from the middle east... it wasn't Exxon mobil gouging prices to rip off the american consumer.
The people will appreciate a free market when they're trying to realize the American Dream. Which is generating a large amount of wealth by starting and managing a business trading merchandise on the free market. Yet once they succeed their wealth is stolen from them and given to those who didn't have a shred of the determination or conviction that they did. Is it John's fault that Bill knocked up sally twenty years ago and never had enough money to start a business of his own? Why should John have to pay for it when he succeeds (creating more jobs and more wealth in the process). You didn't tear down a thing... you'll have to do better than that.
Congressman are supposed to be humble civil servants working for the good of their constituents. Not pandering to the lowest common denominator to get more votes. The free market doesn't apply to government so that entire point is moot.
No reason at all? Is that a fact? Oil consumption has been rising for a very long time, therefore so has demand. Prices don't just fly up and down on the whim of some CEO.
More wealth envy crap. I'm sorry you're upset that you weren't "fortunate" enough to by some crazy twist of fate end up in the driver's seat for a multinational corporation like these people obviously were. They probably just settled for McDonalds, and had the company given to them by some random customer who wandered in.
What would the tax be called if we taxed gasoline, every time it drops by 10 cents a gallon, we tax it by 5 cents more per gallon? I got very used to the price being $4/gallon. I almost feel I have to apologize to the station attendant now that it is only $1.80/gal.
that is a really good point, and is also why we should only tax corporations.
why would you do that? the attendant's wage never changed.
Proton Soup: Taxing corporations causes them to turn around and incorporate the tax right into the price tag of whatever it is they're selling. So I don't see how you agree with my point when I was saying taxing corporations only makes prices go up... pushing the tax burden back onto the people. Therefore it would be beneficial for all of us if the united states didn't have the highest corporate tax rate in the world.
Any money we can save businesses (large and small) is money invested in the economy. Why do we think the answer to our financial problems is relieving prospective employers of money they would use to pay employees and upgrade their facilities? The left wants to suck the life out of our livelihood... our jobs.
try and be consistent now. if the consumer ultimately pays all the taxes as you propose, then it makes no sense to tax everyone when you can just tax a smaller number of businesses. the people pay all the tax, just indirectly. yet now, the tax system is significantly streamlined.
you can't have it both ways, that would be hypocrisy. if on the other hand, you wish to shift the tax burden from the corporations down to the consumers, then the consumer has less money left over to buy goods and it has the same sort of stagnation on the economy you wish to claim taxing from the top does.
Ah. I misunderstood you. I interpreted your post as though you didn't really read anything I typed and just interjected something to the effect of "Yeah, the corporations should just have to pay for everything." Actually I'm a supporter of a movement involving a complete overhaul of our current tax system that you've perhaps heard of. It would be a totally indirect tax in the form of a national sales tax. Sort of radical but it does have widespread support and adheres more closely to what I see as American principles. It would also reduce the tax code from thousands of pages to tens, and abolish the IRS (No more April 15th anxiety)... significantly streamlined. www.fairtax.org
I know we're getting pretty off topic here, but I think there's still some relevance to all this seeing as how the topic relates to taxation, corporate or otherwise.
i think the bolded part is wishful thinking, Congress still likes to pick winners and losers. you'd have to pass a well-thought amendment to keep it fair.
honestly, i could go either way. abolish personal income tax (maybe only anything above $250,000) and only tax corps, or a sales tax. the one argument that i've heard that might shift me in favor of a sales tax is that it becomes a tariff as well.
as far as the current situation and taxing oil, that depends. i don't know what sort of tax breaks the oil companies were enjoying before oil went through the roof. but in general, i'm in favor of keeping energy prices low because energy usage is what drives the economy. GDP (or maybe it was GNP) is roughly proportional to how much we burn. if you don't burn, you don't earn.
There needs to be a happy medium. Of course no one is ever really happy about the middle ground though.
If you tax businesses too much then they will not want to operate here. They will leave and people will be less inclined to start and/or maintain their businesses because it will require more capital.
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