Democrats are STUPID!!! Tax Oil and It RAISES the GAS PRICES

Discussion in 'Energy' started by GHook93, May 17, 2011.

  1. GHook93
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    GHook93 Aristotle

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    Why do they think putting a ginormous tax on the oil companies (which is what taking away the subsidy real is) will low gas prices? Are they fucking nutz?

    Maybe the subsidy is unfair when your talking about an trillion dollar industry I will give you that, but if the Democrats knew anything they would know gas/oil is inelastic to price! Meaning whether gas costs $1 a gallon or $10 a gallon, people will still drive and buy gas. Therefore if we hit the oil companies with a large tax they won't just take it and say thank you sir may I have another. Rather they push cost onto US, the consumer, the driver!

    How can Harry Reid stay with a straight face that taxing the oil comes and raising gas prices even higher is a move to protect the little man! He is not for the little man! He is the little man's worst enemy. I love when liberals talk about the evil corporations. Yet they ignore the fact that corporations and big small business (ones that employee 100-500 employees) employee the vast VAST majority of Americans.
     
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  2. Baruch Menachem
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    Baruch Menachem '

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    I would agree that it would make oil processing and exploration more expensive, and make us more dependent on foreign sources.

    Which, I am beginning to think is the ultimate goal of this kind of foolishness
     
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  3. Cuyo
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    Cuyo Training a Guineapig army

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    Whats your point? I didn't know you were a big government type. Why shouldn't the market regulate the price?
     
  4. Epsilon Delta
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    Epsilon Delta Jedi Master

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    Well, I didn't find that Reid quote anywhere, but as far as I'm concerned Reid is an ass either which way. But what I do think what you're taking for granted is the assumption that just because these companies are making more money, that prices would go down. You yourself just stated that oil has a pretty inelastic demand curve. Your assumption that $2 billion in subsidies (Senate to vote today on ending tax subsidies for oil companies - 2chambers - The Washington Post) somehow keeps the price of oil down does away with the possibility that these companies could very well not want to increase production or expand supply to lower prices but to keep them at current, profitable levels; $100 a gallon might be working pretty well for them, much better than a $60 one, considering consumption cannot change much in reaction to price increase (precisely because demand is [relatively] inelastic).

    What is actually occurring is that these companies are making $60 billion in profits, record-breaking profits (and that's just the top 3 of them - Fortune 500 2011: Fortune 1000 Companies 1-100 - FORTUNE on CNNMoney.com). It's the second largest bulk of profits out of all industries, and all five have been among Forbe's top 25 profit-makers for years. The Big 5 Oil companies are doing just fine. Considering that the rest of the country is going down the toilet, why would you subsidize them? Makes you think about the nature of subsidies: what should be subsidized? Should everything be subsidized, after all you can make the same kind of arguments ("will kill jobs," "hurt competitiveness") for almost every industry? What makes oil different, that it's a "national security interest"?

    The real national security interest is Energy here, and there are other ways of solving the problem: namely using the market approach (!) and allowing the high prices to shift investment and consumption to alternatives [this approach has the added benefit of potentially shifting to renewable sources of energy so that, in the future, we don't have to base our entire civilization on a single, finite commodity.] This is what occurs in markets: when goods become expensive a substitution effect comes into play.

    In any case, oil prices will also move according to a variety of factors which are in no way limited to things that companies can control, they can't shift a whole lot more to the consumer because the despite the fact that it is a relatively inelastic good, demand still can drop and actually has been (Forecast Shifts Focus to Oil Demand - WSJ.com). And either which way, whether or not the government gives them an extra 5% profits per year for no particular reason will not stop them from exploring, gaining the rights to, and/or drilling everywhere and anywhere as long as they can keep their profit margins as high as they have been. Remember that the bottom line is money, and they're going to keep making boatloads of it subsidy or no subsidy.
     
  5. GHook93
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    GHook93 Aristotle

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    Same reason we subsidize farming goods. Those are essential products that we as HUMANS need. Does it make me mad that companies that make billions and record profits get billions in tax subsidies! Absolutely. HOWEVER, at this point taking away those subsidies would be like adding a tax to oil. Contrary to popular opinion we still get the majority of our oil state side. Therefore, taking away the subsidy and the cost savings to the oil companies that would be removed would be pushed onto us. We would see it at the pump. However, the so-called savings to the government wouldn't be realized to us or even really the deficit.


     
  6. AquaAthena
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    AquaAthena INTJ/ INFJ

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    Question by Government Union Worker: Why is Obama giving B in tax dollars to a Brazilian Oil Company to drill oil in the Gulf?
    While American rigs are sitting idol, and Americans are unemployed

    Obama is giving $ 2B in tax money to a Brazilian Oil Company so THEY can drill in the Gulf, using Brazilian labor, then selling OUR oil back to us…

    Is it ѕtrаחɡе tһаt wе give tο a company tһаt һаԁ profits οf $ 17 billion last year

    Or does it make sense when you realize tһаt George Soros bουɡһt stock іח tһе company.

    Q&A: Why is Obama giving $2B in tax dollars to a Brazilian Oil Company to drill oil in the Gulf? | Offshore Drilling jobs
     
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  7. Baruch Menachem
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    Baruch Menachem '

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    This is not a subsidy. This is normal US tax accounting practice for all businesses. One can argue for or against ACRS depreciation rules. Heck, you can argue that depreciation is a bad deal in tax policy, but singling out the oil folks for special treatment on taxes just shows the goal here is to grandstand, not to actually do anything useful for the economy.

    What might be better is reducing rates from 35% of profit to 5% of net sales (Sales - Cost of Goods sold) and not bother with all the million different ways taxes are adjusted.
     
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  8. uscitizen
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    uscitizen Senior Member

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    Yes people will still buy $10/gal gas but will buy LOTS less of it.
    And start whining why dind't the govt do more to promote electric cars ;)
     
  9. Leweman
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    Leweman Gold Member

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    Greedy corporation baaaaaaaaaaaaaaaad. Greedy government goooooooooooooooood.
     
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  10. GHook93
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    GHook93 Aristotle

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    Nice red herring on the electric car ghost! Read any of my posts, I constantly promote the electric car and pray this first "new" wave succeed.

    But you ignored the fact that taking away the subsidy with cause gas prices to increase. So the Harry Reid so called crusade against the evil oil companies in the name of the little man is a farce! All he will do is cause gas prices to increase and say that gas makes us ill and it's GWB's fault!
     

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