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June 10, 2008
Congress Proposes Mega Tax to Oil Companies
As the average price for a gallon of gas tips over $4 across the country (in Los Angeles, the average is about $4.46 for regular), the Senate will vote today on a "windfall tax" that would snag some of the top oil company's profits at the tune of $17 billion -- in other words, the tax breaks they would expect in the next ten years. $36 billion was earned by the top five oil companies during the first quarter of this year.
Democrats, who proposed the big-five oil tax, face Republican filibustering on the Senate floor and the need for 60 votes to proceed with the legislation. Oil companies, pointing to a 1980 "windfall tax," obviously warned that such a tax could decrease domestic oil production, therefore increase imports, thus even higher gas prices.
In California, the tax applied to a gallon of gas is more than any other state. "State and federal excise taxes add up to 37.8 cents per gallon in the Golden State, but additional state, county and local sales taxes bring the grand total to 63.9 cents of taxes per gallon in California," explains LA Times Bottleneck blogger, Steve Hymon. "The U.S. average is 47 cents per gallon."
Photo by ccdg via Flickr
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tax the gains from hedge funds and institutional investors - that is the reason for the outlandish prices.
this is a bubble - all will soon return to normal.
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"tax the gains from hedge funds and institutional investors - that is the reason for the outlandish prices."
I agree.
"this is a bubble - all will soon return to normal."
I disagree. The prices will remain as high as their peak price even after the bubble bursts.
If these greedy bastards can sell gasoline at this price, they will continue to regardless of how low the price of a barrel goes.
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Stupid idea. If they have a windfall tax on the oil companies, will they be able to tax the foreign owned oil companies. Certainly they wont be able to have a windfall tax on the foreign state owned companies.
So therefore this stupid tax only takes money away from the American oil companies thereby reducing their competitiveness with the foreign oil companies.
Stupid typical liberal idea that actually goes against all standard basic economic rules.
All democrats really need to go back to school and take an Economic 101 class.
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tornhuevos28 you are a typical, naive, deluded, free market worshiping, fool.
You actually think that taxing these rich greedy bastards is the problem. The problem is giving them too much power. But people like you will continue to do so and will continue to bend over for them you entire lives.
Wake up dufus!
They'll never let you into their country clubs unless you're one of the ones serving them their dinner, oe their drinks, or wiping their dainty asses. Then you can be sure you'll be entering and leaving by way of the service door. You're an insect to them. The only time you're of any value is when you're buying into a load of crap peddled by the small change grifters that they hire for pennies, to write the laws that will yield them the big dollars.
So keep maxing out your credit card filling your tank with their good old $4.50 a gallon gas (and rising). They own the credit card companies too. When they raise your interest rates so high that you can only make the interest payments, they'll have you right where they want you.
Enslaved!
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jrb - prices are high because institutional investors (ie public employee retirement funds) hedge funds and investment banks are placing enormous sums of money in the oil/commodities futures markets - which is not governed by any US oversight similar to the SEC.
these are the same people who drove up real estate prices, the same people who drove up the dot-com stock prices, etc.
bubbles burst - there is simply no shortage of oil. last i checked, there were short lines at the stations and plenty of fuel in the pumps. we have more than enough supply inside the US borders for years to come.
this is only speculation (even OPEC is stating as such) that is feeding the market and speculators always return their gains in the freemarkets.
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The companies will just pass the cost of the tax onto consumers the same way cell phone companies pass on their phone line taxes. The only way to truly reduce your gas expense is to get out of the car and onto a bike or public transit.
@jrb: calm down, you sound rabid.
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"... prices are high because institutional investors..."
Yes nick, I'm sure public sector investors are the only people driving up the price of a barrel of crude. The oil companies themselves have no motivation in driving up the price of a barrel of crude do they? And as you say they aren't regulated by the SEC.
Yea, I trust them!
And amcalis, of course you're right. Maybe if we don't tax them the price of gasoline WON"T go up. (cough cough)
"you sound rabid."
Yea I tend do that when I smell a good ENRONing.
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i said institution investors, not public sector investors (although they are included in institutional) - i also included hedge funds and investment banks. there are other players involved too.
i said the commodities future markets do not have a governing body.
you are a potential candidate for an online business 100 class for university of phoenix. maybe even devry.
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show of hands!
anybody else coasting to work on fumes ?
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"you are a potential candidate for an online business 100 class for university of phoenix. maybe even devry."
Well golly gee wizz nick It don't take a hell of a lot of yer fancy book larnin' to know when you're getting screwed.
If the oil commodities market is as unregulated as you say, then I'd bet money that oil companies are manipulating it for their own financial gain.
So I have to ask nick, was this another Republican, "smaller govt., we can trust industry to police themselves", brain fart?