Post by Woody Williams on Aug 6, 2008 15:55:48 GMT -5
More Taxes Will Mean Less Oil
By INVESTOR'S BUSINESS DAILY | Posted Tuesday, August 05, 2008 4:20 PM PT
Energy Policy: Democrats say there should be a limit to the profits oil companies can make. Should there also be a limit on the taxes government can take? Just who's the profiteer here?
In an admission that increased supply means lower prices, Barack Obama, in yet another flip-flop, has proposed releasing 70 million barrels of oil, about a week's worth of imports, from the Strategic Petroleum Reserve.
Last month he told reporters in St. Louis just the opposite: "I have said, and in fact supported, a congressional resolution that said we should suspend putting more oil into the strategic oil reserve," he said then. "The strategic oil reserve, I think, has to be reserved for a genuine emergency," he continued, saying a terrorist attack was an example of such an emergency.
The GOP campaign to "drill here, drill now" has resonated with the American public tired of paying $4 a gallon because of high gas taxes and congressionally restricted supply. Obama's poll numbers have dropped significantly during this effort, something team Obama obviously considers a "genuine emergency."
But as he supports releasing oil from the SPR to increase supply, he proposes a revival of the failed windfall profits tax that in its earlier incarnation decreased domestic supply and increased foreign imports. The man who pokes fun at John McCain's economic knowledge ignores the simple economic truth that when you tax something you get less of it.
Speaking in support of Obama's proposal to revive the windfall profits tax, Illinois' senior senator, Dick Durbin, recently declared that, "The oil companies need to know that there is a limit on how much profit they can take in this economy." Why is there no limit to the increased taxes Obama and the Democrats want to take in this economy?
Obama once called the McCain-supported plan for a gas-tax suspension a "stunt." Now he wants to take a "reasonable amount" of oil company profits and rebate, a la George McGovern, $1,000 to families and $500 to individuals as a part of a second stimulus package to offset high gas prices, a big part of which is federal, state, and local taxes on both oil producers and consumers.
Obama does not define what a "reasonable amount" is. Nor does he define at what point profit, which is an indicator of success and not greed, becomes a windfall. Exxon made a dime on a dollar in 2007. The oil and gas industry as a whole made 8.3% compared with 8.9% of all U.S. manufacturing. Meanwhile, the federal government operated at a huge loss.
Electronics company LG saw its profits grow by 505% in 2007. Abbott Laboratories saw its profits soar 110% Google had a profit margin of 25.3%, more than double Exxon's. GE's profit was 10.7%, about the same as Exxon's, but do its subsidiary media outlets such as NBC and MSNBC report that?
In the first half of this year, Exxon Mobil's after-tax income rose 15% to $22.6 billion. The operative word is "after-tax," for what advocates of a windfall-profits tax to redistribute income ignore is that Exxon Mobil also paid a record $61.7 billion in taxes. The feds already are taking more than a "reasonable amount."
Oil exploration is a risky business. Vast sums are expended in the search for black gold, with dry holes too often the result. America was built by such risk-taking, motivated in part by the hope of great reward. Without such incentives, few chances are taken.
All this talk about allowing offshore drilling as part of some grand compromise on energy is a con game. Democrats know there will be no incentive to drill for oil if the profits from any success will be confiscated by a government that takes none of the risk. Then they'll criticize the oil companies for sitting on oil
Once upon a time, young America was advised to go west. Today, we should be telling our risk-takers to drill deep
By INVESTOR'S BUSINESS DAILY | Posted Tuesday, August 05, 2008 4:20 PM PT
Energy Policy: Democrats say there should be a limit to the profits oil companies can make. Should there also be a limit on the taxes government can take? Just who's the profiteer here?
In an admission that increased supply means lower prices, Barack Obama, in yet another flip-flop, has proposed releasing 70 million barrels of oil, about a week's worth of imports, from the Strategic Petroleum Reserve.
Last month he told reporters in St. Louis just the opposite: "I have said, and in fact supported, a congressional resolution that said we should suspend putting more oil into the strategic oil reserve," he said then. "The strategic oil reserve, I think, has to be reserved for a genuine emergency," he continued, saying a terrorist attack was an example of such an emergency.
The GOP campaign to "drill here, drill now" has resonated with the American public tired of paying $4 a gallon because of high gas taxes and congressionally restricted supply. Obama's poll numbers have dropped significantly during this effort, something team Obama obviously considers a "genuine emergency."
But as he supports releasing oil from the SPR to increase supply, he proposes a revival of the failed windfall profits tax that in its earlier incarnation decreased domestic supply and increased foreign imports. The man who pokes fun at John McCain's economic knowledge ignores the simple economic truth that when you tax something you get less of it.
Speaking in support of Obama's proposal to revive the windfall profits tax, Illinois' senior senator, Dick Durbin, recently declared that, "The oil companies need to know that there is a limit on how much profit they can take in this economy." Why is there no limit to the increased taxes Obama and the Democrats want to take in this economy?
Obama once called the McCain-supported plan for a gas-tax suspension a "stunt." Now he wants to take a "reasonable amount" of oil company profits and rebate, a la George McGovern, $1,000 to families and $500 to individuals as a part of a second stimulus package to offset high gas prices, a big part of which is federal, state, and local taxes on both oil producers and consumers.
Obama does not define what a "reasonable amount" is. Nor does he define at what point profit, which is an indicator of success and not greed, becomes a windfall. Exxon made a dime on a dollar in 2007. The oil and gas industry as a whole made 8.3% compared with 8.9% of all U.S. manufacturing. Meanwhile, the federal government operated at a huge loss.
Electronics company LG saw its profits grow by 505% in 2007. Abbott Laboratories saw its profits soar 110% Google had a profit margin of 25.3%, more than double Exxon's. GE's profit was 10.7%, about the same as Exxon's, but do its subsidiary media outlets such as NBC and MSNBC report that?
In the first half of this year, Exxon Mobil's after-tax income rose 15% to $22.6 billion. The operative word is "after-tax," for what advocates of a windfall-profits tax to redistribute income ignore is that Exxon Mobil also paid a record $61.7 billion in taxes. The feds already are taking more than a "reasonable amount."
Oil exploration is a risky business. Vast sums are expended in the search for black gold, with dry holes too often the result. America was built by such risk-taking, motivated in part by the hope of great reward. Without such incentives, few chances are taken.
All this talk about allowing offshore drilling as part of some grand compromise on energy is a con game. Democrats know there will be no incentive to drill for oil if the profits from any success will be confiscated by a government that takes none of the risk. Then they'll criticize the oil companies for sitting on oil
Once upon a time, young America was advised to go west. Today, we should be telling our risk-takers to drill deep
