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MORE TAXES, CHEAPER GAS...NOT
Pennsylvania Republican Arlen Specter, really just a Democrat with an R next to his name, has proposed a way to "get even" with the oil companies. You see, since they're earning so much money with the price of oil the way it is, he wants to institute a windfall profits tax. Given the overall state of economic ignorance in this country (thanks to government schools) he just might get it through. But it is a terrible idea. Let's count the ways why.
First of all, memorize the following sentence and commit it to memory for as long as you live: corporations do not pay taxes. The shareholders and customers of corporations pay those taxes. So guess what that means? If Senator Specter gets his way, the oil companies will simply just raise prices to cover their loss to the government. So by "punishing" ExxonMobil for being successful, Specter is really punishing the public. Nice going.
Specter is trying to score cheap political points by validating public ignorance about high gasoline prices. He's pretending to buy into the school that gas prices are high because the oil companies are inflating the prices to increase their profits. It's a conspiracy! Well, if that's the case, then it must be a conspiracy that stretches all the way around the globe. Because right now oil is at $75 a barrel everywhere. That's the single biggest factor in the price of gasoline right there. Do the oil companies control the price of a barrel of oil? Nope.
And besides...don't we want American oil companies to make huge profits? Isn't that the idea...to bring that money home? I guess in Arlen Specter's world, facts and common sense don't rate very high. Just another day in the life of a Washington politician. Oh, and check this quote from Carl Levin, Senate Democrat, about the windfall profits tax: "If the president would call the oil companies into the Oval Office and tell them he's going to support a windfall profits tax ... I'll bet that the price of gasoline would come down within a matter of days."
Oh really? Since high oil prices are a big reason George W. Bush's popularity is in the tank, don't you think that if he had control over the price of gasoline that he would do something about it?
Bottom line: Politicians like Specter and Levin can demagogue this issue for political gain because of the ignorance of the American people on issues such as profits vs. profit margins, an ignorance born and nurtured in our hideous system of state-controlled education.
Hobbit said:http://boortz.com/nuze/index.html
Note that this link was valid at the time that this was posted, but will be different the morning after. The article has been posted in its entirity.
Yep, that's right, they're talking about taxing 'windfall' profits because corporations are evil. The truth is that the profit margin of gas companies is at an all time low, and any tax levied agains them will only further drive up gas prices. Insufferable!!
archangel said:oil company profits are not at a all time low...some 35 billion for the quarter
Hobbit said:
Read the one bolded word in my post. Then read it again. One more time, just for clarity. Now, I did not say profits were at an all time low. I said that the profit MARGIN was at an all time low. And here it is again, folks, the quality government education that never bothers to explain the difference between the profit and the profit margin. It makes it so much easier to turn the populace against corporations so they can tax you and have you thank them for the favor. Now, if you want an example of what I mean, just remember that the profit margin is the percentage generated by dividing the profits by the gross income. In other words, it's the percentage of income that is profit. If my business's gross income is $10, but I spent $5 on my business, my profit is $5, making my profit margin %50. If my business made $1000, but I spent $990 on it, then I made $10 in profit, twice what the other business made, but the margin is a mere %1.
The fact is that oil profits are up because people are buying more gas. The profit margin, however, is down, since the competitive nature of the open market drives the price down.
archangel said:No need to yell...your posted link said nothing about oil companies profit MARGIN...it made a general statement about profit vs profit margin...so please if you would post a link about the oil companies profit vs profit margin...thanks in advance! and the above statement open market drives the price down...damn where do you live...gas prices here are doing nothing but going up...up...up! so the profit margin must also be going up...up...up!
Hobbit said:No, costs are going up, up, up. The people who sell the gas have no control over the price of a barrel of oil, currently $75. Free market drives the cost of gas as low as it can go, which, thanks to limited supply due to a lack of refineries, lack of domestic drilling, and taxes, is not very low. If gas companies could lower their prices without taking a loss, they would.
And sorry about the big, blaring word. It's just that 9/10 people I meet have the exact same reaction if I say a word about the low profit margins at the gas companies. Apparantly, nobody knows the difference between profits and profit margins.
As for an additional link, check this out (in the paragraph "Is Being Profitable a Crime?"). Exxon had a profit margin of about 9.9% in the third quarter of 2005. Johnson and Johnson had a profit margin of 18%. Bank of America: 22%. Exxon's profit margin sucks compared to other, comparably sized businesses.
Hobbit said:No, costs are going up, up, up. The people who sell the gas have no control over the price of a barrel of oil, currently $75. Free market drives the cost of gas as low as it can go, which, thanks to limited supply due to a lack of refineries, lack of domestic drilling, and taxes, is not very low. If gas companies could lower their prices without taking a loss, they would.
And sorry about the big, blaring word. It's just that 9/10 people I meet have the exact same reaction if I say a word about the low profit margins at the gas companies. Apparantly, nobody knows the difference between profits and profit margins.
As for an additional link, check this out (in the paragraph "Is Being Profitable a Crime?"). Exxon had a profit margin of about 9.9% in the third quarter of 2005. Johnson and Johnson had a profit margin of 18%. Bank of America: 22%. Exxon's profit margin sucks compared to other, comparably sized businesses.
