...Senators raise idea of taxing 'obscene' oil profits
Well, that would be fine, if there was no such thing as supply and demand. Because oil is a commodity, and the only way we can get oil is from people who have oil wells, and you can't just switch to something else to run your car on, any taxes pretty quickly are passed right along to consumers. Second, if you want incentives to get oil companies to explore and drill for more oil, profits are a pretty good way of doing that. What might not be profitable to exploit at $50 a barrel suddenly becomes much more attractive at $70. Third, unlike Senators, it's not like oil companies have a big room full of dollar bills that they go and wallow in--profits are useless unless they are either returned to the economy either as dividends for stockholders (which would include smart retirees who put some of their 401K money in energy stocks) or to the economy as new construction and exploration, or as raises and bonuses for employees--all of which will be taxed in some way. Finally, it has long been a staple argument from the environmentalists that the government should be RAISING gas prices through burdensome taxation to make people drive more fuel efficiently, or alternately, to fill up all the empty mass transit boondoggles. So, it's not that they really dislike high gas prices--they just want the government to control all that extra cash, rather than private individuals.
No, I don't like paying more for gasoline. But adding on a tax that will only get passed along to me ISN'T HELPING ME! You want to reduce long-term reliance on petroleum? Open up more public land for drilling, and quit blocking the construction of new nuclear plants.
Posted by Terry Oglesby at April 24, 2006 01:43 PM