Help. Some guy thinks the windfall tax is a terrible idea

[George_Bonanza]

"The company has spent a substantial amount of capital and resources to create that kind of profit, and it's outrageous for some government bureaucrats to decide that it's too much profit. We live in a system that is built on the capitalist model: profit is a good thing. Aside from the moral implications of a "windfall profits tax," there are also practical consequences. Exxon Mobil employs over 100,000 people. Hurt the company, you hurt the employees. If you hurt the company, you also hurt those who are invested in the company. Millions of people own stock in the top oil companies, and that includes middle-class individuals and retirees. Why should we punish them for investing in a profitable company?

Additionally, it's smart to look at more than just the sensationalist headline "$12 billion made by big oil company!!!" If you look at the quarterly report, Exxon didn't even make most of its money in the United States. They made about 80% of it outside the United States. You might find this next fact surprising. As I'm sure you know, oil companies usually classify net incomes as coming from either "downstream" sources or "upstream sources." The downstream portion of the company's activities include refining, transporting, and retailing the finished product (gasoline, heating oil, natural gas, etc.). When you compare the 2Q07 and 2Q08 numbers on Exxon's US downstream net income, you see that they were actually 83% lower this year, which seems to contradict the screams about the company ripping off US consumers and needing to be taxed heavily.

Sen. Obama's whole scheme is nothing more than populist pandering. That fits right in with another ineffective economic policy being trotted out this year: protectionism."

I don't know much about economics, so how can I counter a statement like this?

[Tandalayo_Scheisskopf]

1. You can tell him...

That they are doing 100% of their damage IN the US. And they are, through subsidies and tax breaks, using tax dollars to do their damage.

[truebrit71]

2. Big Oil made $1485 profit per MINUTE last quarter whilst gas was at all-time highs...

..Who's getting screwed? We are. If the high price of oil is the reason that gas prices are higher, how come Big Oil keeps on reaping bigger and bigger profits? Surely, if the oil price was REALLY the catalyst behind the high price of gas, wouldn't their profit margins be SHRINKING?

They are GOUGING us and a Federal windfall tax is a bloody fine idea.

Either that or nationalize the lot of them and have the profits pay down the National Debt.

[B Calm]

3. Predatory capitalism will destroy this country. It has to be stopped and

a windfall profit tax is the answer!

[Turbineguy]

4. A windfall tax

will precipitate and army of tax accountants to offset its impact and an army of lobbyists to overturn it. All this has to be paid for. The greatest windfall OPEC and the big oil companies have had has been the "geo-political uncertainty" the Bush administration has injected into the mix. I figure this to be $50 per barrel or $1.60 in each gallon of gasoline.

The windfall profits tax is a red herring.

(No, I don't work for an oil company).

[B Calm]

8. Okay, I'll partly agree with you. While it's true there would be an army of lobbyists

to overturn it, so the only answer is to nationalize the oil industry!

[Overseas]

5. How about a REFUND for all of the subsidies they clearly don't need?

Maybe those Republican profit-at-all-costers would at least allow for refunding all the taxpayer money they received in subsidies? That would be a start.

Republicans always justify huge profits by saying the poor companies invest so much in R&D. Do they forget that companies DEDUCT THOSE EXPENSES from their taxes? Or get more taxpayer money from subsidies for those activities?

[valerief]

6. How much in subsidies do they get from those countries where they

earned that 80% of revenue? Zero? I thought so. I wonder what U.S. revenue would be if you added back the subsidies and tax breaks.

[tjwash]

7. Is he a exec at an oil company?

Or is he just too fucking stupid to know that goes against everyone's best interests?

Hell...even in Dubai they get to share in the profits of the oil that gets pumped out of the ground. Here in America, they get to pump it for free and charge everyone for it afterward.

[zbdent]

9. um ... "windfall profits tax" is like "death tax" ... bullshit ...

call it what it really is ... rescinding the massive tax breaks that the Republicans gave to the Oil Companies ...